30th May 2019 10:27
LONDON (Alliance News) - Aptitude Software Group PLC said Thursday it has agreed to sell its wholly owned subsidiary, Microgen Financial Systems Ltd, for GBP51.0 million to private equity firm Silverfleet Capital Partners LLP reversing its previous plans to demerge and list the business on London's AIM market.
Shares in Aptitude Software were up 9.7% in mid-morning trade at 435.67 pence each.
The sale is conditional on the approval of Aptitude Software shareholders at a general meeting, but the company expects the deal to go through in late June.
Aptitude Software - which provides financial management software - said the disposal is a "major milestone" in the company's strategy of creating two independent software businesses.
The company said this sale "represents the start of a new era", with the Aptitude Software business becoming the "total focus" of the company.
"I am pleased to announce today the sale of Microgen Financial Systems. The disposal represents a significant milestone in the strategic development of the group and, as was the case with the previously announced proposed demerger, the board strongly believes that the disposal enhances the long-term prospects of both businesses and will benefit clients and employees," said Chair Ivan Martin.
Back in March, Aptitude Software said it was planning on demerging Microgen Financial Systems and listing the business on AIM. At the time, Martin said the listing "will enhance Aptitude Software Group's ability to allocate capital and management attention on the higher growth Aptitude Software business".
On Thursday, the company said the sale, instead of a demerger, "represents fair value". In a statement, Aptitude Software said the sale "recognises Microgen Financial Systems' market position, track record of organic growth and positive cash characteristics."
Martin added: "The disposal process provides certainty over the crystallisation of the value of Microgen Financial Systems for Aptitude shareholders, without the longer timeframe and risk associated with a demerger process and we will evaluate, in consultation with our shareholders, how best to deploy the net proceeds of the Disposal for the benefit of shareholders over the coming months."
Aptitude Software said it intends to return "a significant majority" of the net cash proceeds, which are expected to be about GBP48.4 million, to shareholders.
In 2018, Microgen Financial Systems recorded pretax profit of GBP9.1 million on revenue of GBP18.0 million, while the overall group recorded GBP16.3 million in pretax profit on revenue of GBP70.3 million.