13th Oct 2014 09:30
LONDON (Alliance News) - GB Group PLC Monday said it has agreed to buy CDMS Ltd, which trades as Transactis, for up to GBP6 million.
According to documents filed at companies house in 2013, CDMS's parent company is Shop Direct Holdings Ltd, which is the holding company of Shop Direct Group. According to GB Group's statement on Monday, Shop Direct Group is a customer of Transactis, as are Nationwide Building Society, Betfair and HM Revenue & Customs.
In a statement, GB Group said it will pay GB4.5 million in cash, as well as GBP500,000 in shares, upon completion of the deal for the data management, customer insight and anti-fraud services provider. A further GBP1 million in shares will be deferred for 12 months following completion and depends on performance-related conditions.
The price of the initial share payment will be determined according to the five-day volume weighted average price of GB shares at completion, whereas the price of the deferred payment, should performance conditions be met, will be calculated with reference to the five business day volume-weighted average price of GB shares.
GB Group shares were Monday quoted down 0.7% at 140.00 pence.
For the year ended June 30, 2014, the Transactis unaudited management accounts show revenue of GBP6.3 million, a gross profit of GBP3.7 million, and a net asset value of GBP5.2 million. However, net asset value at completion is expected to be materially lower, according to GB group, due to asset impairments and write downs.
"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," GB Group said in a statement.
According to GB Group, there is a split between the acquisition agreement and completion of the acquisition for a period of about three weeks, during which period neither party has any right to terminate the deal except in the event that certain completion deliverables are not provided by the the owners of Transactis on completion.
"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," GB Group Chief Executive Richard Law said in a statement.
By Samuel Agini; [email protected]; @samuelagini
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