16th May 2018 14:08
LONDON (Alliance News) - LoopUp Group PLC said on Wednesday it will raise GBP50.0 million through a share issue to fund its GBP61.4 million acquisition of Warwick Holdco Ltd, the holding company for MeetingZone Group.
Shares in LoopUp Group were up 7.6% at 468.00 pence per share on Wednesday, giving it a market capitalisation of GBP197.6 million.
Conference call software firm LoopUp will raise the funds via the issue of 12.5 million shares at 400.00p each.
The London-listed firm is buying MeetingZone - a UK conference services provider - from GMT Communications Partners on a debt-free and cash-free basis. LoopUp said the deal constitutes a reverse takeover under AIM rules, and will be subject to shareholder approval.
The remaining acquisition costs will be financed through a GBP17.0 million term loan from Bank of Ireland. LoopUp will also have access to an additional GBP3.0 million revolving credit facility, which will not initially be drawn.
LoopUp intends to increase the scale of its conferencing business through the acquisition and improve its buying power with suppliers.
The acquisition is expected to save LoopUp GBP500,000 in 2018, with adjusted basic earnings per share set to increase in 2019.
In 2017, MeetingZone made a gross profit of GBP15.0 million and its revenue was GBP22.5 million with adjusted earnings before interest, taxation, depreciation and amortisation of GBP5.0 million.
LoopUp in 2017 reported revenue of GBP17.5 million and a pretax profit of GBP729,000.
"The acquisition of MeetingZone will help us to enhance our already strong competitive position, add significant scale to our business and amplify the network effect of our offering. It will also provide us with an opportunity to reinvest further in our business, in particular our people, product and our 'Pods'," said LoopUp Co-Chief Executive Officer Steve Flavell.
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