Published: Monday October 13, 2014
Written by on Investor News
GB GROUP PLC
("GBGroup" "GBG" or "The Group")
Acquisition of CDMS Limited (trading as "Transactis")
GBGroup, the identity intelligence specialist, is pleased to announce that it has exchanged on a sale and purchase agreement for the acquisition of Transactis for a total consideration of up to £6 million.
The initial consideration will be satisfied at completion by a cash payment of £4.5 million from the Group's existing cash reserves and £0.5 million of shares in GBG. A further £1.0m of consideration in shares will be deferred for a period of 12 months following completion contingent on certain performance conditions being met.
The initial share consideration of £0.5 million shall be settled by reference to the five day volume weighted average price of GBG shares as at the completion date. The number of shares to be issued to satisfy the £1.0 million of deferred consideration will be calculated by reference to the five business day volume-weighted average price of GBG shares prior to the date of issue.
Based in Liverpool in the UK, Transactis aggregates customer transactional data and delivers anti-fraud and marketing related services to both the private and public sectors in the UK. The acquisition will strengthen GBG's Identity Intelligence offerings with a unique data asset (see below), will add a technology portfolio that complements GBG's existing solutions and will bring with it recurring revenues with blue chip customers such as Nationwide Building Society, Betfair, HMRC and Shop Direct Group.
Transactis accesses data on approximately 40 million consumers, derived from a broad range of retailers, which helps Transactis clients understand an individual's propensity to buy as well as identifying potential patterns of fraud. Transactis combines this data with its own proprietary software and analytics to offer solutions to its customers.
For the year ended 30 June 2014, the Transactis unaudited management accounts had revenues of £6.3 million, a gross profit of £3.7 million and a net asset value of £5.2m1. Following a reorganisation to be conducted between exchange and completion, the acquisition is expected to be earnings accretive in the first full year post acquisition.
There is a split between today's exchange and completion of the acquisition for a period of approximately 3 weeks, during which period neither party has any right to terminate the acquisition agreement save in the event that certain completion deliverables are not provided by the vendor on completion. The completion date is anticipated to be 31 October 2014.
Richard Law, Chief Executive Officer, of GB Group commented:
"Transactis has made a considerable investment over the last few years to create a strong technology platform and attracted some excellent customers in both the public and private sectors. This acquisition will add a valuable data asset which can be deployed in our existing software products and further strengthens GBG's identity intelligence credentials."
1 It is anticipated that the net asset value at completion will be materially lower than £5.2million as a consequence of the impact of asset impairments and write downs.
GB Group plc
Richard Law, Chief Executive
Dave Wilson, Group Finance Director & Operations Director
Peel Hunt LLP (Nominated Adviser and Broker)
Daniel Harris 020 7418 8900
Heather Armstrong 020 7653 9850