20th Nov 2013 08:48
LONDON (Alliance News) - Software provider Ideagen PLC Wednesday said it has bought Pentana Inc for up to GBP3.05 million in cash, giving it a foothold in the financial services sector and the outsourced risk and compliance market.
Ideagen provides information management software for highly regulated organisations. Pentana provides the same type of software to about 350 customers, including eight of the top 10 UK accountancy firms. It made a small pretax profit in 2012 on revenues of GBP2.4 million.
The companies have identified GBP0.4 million of synergies they think they can achieve in the 12 months to end-April 2015, as well as cost cutting and operational efficiencies.
"The acquisition is therefore expected to be earnings enhancing in the first full financial period following completion of the Acquisition - the 12 month period ending 30 April 2015," Ideagen said in a statement.
Ideagen will pay with cash from existing resources. It will pay an initial tranche of GBP2.25 million, and could pay up to GBP0.8 million more if certain recurring revenue targets are met in the first year after completion.
"The combination of Pentana and Ideagen will enable the enlarged group to rapidly develop new markets and we believe provides an outstanding opportunity to leverage the growing risk and compliance outsource market," Chief Executive David Hornsby said.
"We are confident that we can make the Pentana business significantly more profitable over the next 12 months as we integrate it into the rest of the group," he added.
Ideagen shares were up 6.4% at 27.65 pence early Wednesday, one of the biggest gainers on AIM.
By Steve McGrath; [email protected]; @SteveMcGrath1
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