7th Aug 2018 11:26
LONDON (Alliance News) - Proactis Holdings PLC on Tuesday said it agreed to acquire software business Esize Holdings BV and expects to report a significant rise in earnings for the recently ended financial year.
The company, which helps businesses in streamlining their supplier base, said it expects to report revenue of GBP52 million for the year to the end of July and adjusted earnings before interest, taxes, depreciation, and amortization of GBP17 million. The prior year, Proactis posted a revenue of GBP25.4 million and adjusted Ebitda of GBP7.9 million.
The result was driven by strong deal intake, the company said, with total initial contract value of GBP8.7 million and 119 upsell deals. In financial 2017, the contract value and deals stood at GBP4.1 million and 110, respectively.
"I am encouraged by the expected out turn for the year, particularly with regard to underlying growth driven by the rate and value of new deal intake and upselling activity," said Proactis Chief Executive Hamp Wall.
"I am optimistic that this will continue for the foreseeable future and that we are confident of returning to normalised levels of growth and churn into financial 2019," added Wall.
Also, Proactis said it will purchase Netherlands-based Esize for up to EUR15.2 million to provide it with additional capabilities in the travel & expense management and contract labour markets.
Elsize has 60 customers across the private, which deliver high levels of contracted annual recurring revenue. For 2017, Esize reported revenue of EUR5.1 million and pretax profit of EUR600,000.
The final cost of acquisition comprises of an initial consideration of EUR14.2 million and a deferred contingent consideration of between EUR500,000 and EUR1.0 million based on Elsize achieving certain revenue targets for the year ending July 2019.
Proactis said it intends to pay EUR9.6 million in cash and EUR3.0 million by way of a convertible loan note. The remaining amount will be covered through 1.3 million shares issue at a price of 165 pence each.
Shares in Proactis were trading 3.7% lower on Tuesday at 104.00 pence each.
"Acquisitions are a key part of our group's growth strategy and Esize perfectly satisfies our acquisition criteria," said Wall.
"The combination will give Esize the opportunity to add new products and services to our existing portfolio," added Esize Chief Executive Tim Schaefers. "This will give our customers even more options which may drive further growth."
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