Acquisition of IMSM

26 July 2023

Marlowe plc

Acquisition of IMSM

Marlowe plc ("Marlowe" or the "Group"), the leader in business-critical services and software which assure regulatory compliance, announces that it has acquired IMSM Holdings Limited and International Management Systems Marketing Limited (together, "IMSM"), a leading ISO certification and quality management provider, for an expected enterprise value of £17.4 million (the "Acquisition").

Established in 2004 and headquartered in Wiltshire, UK, IMSM provides ISO auditing and certification services to approximately 5,000 UK and international clients. This acquisition is a key step in Marlowe's strategy to broaden its GRC capabilities into the highly complementary ISO certification market and presents an attractive opportunity to cross-sell into the Group's existing customer base. Additionally, there are opportunities to digitalise IMSM's services via collaboration with Marlowe's SaaS offering.

IMSM audits the quality of clients' business processes and internal systems on a recurring basis to ensure compliance with ISO standards in areas such as safety management, information security and environmental management. IMSM provides these services to both SMEs and larger clients on a mix of annual and multi-year contracts, and shares a similar client base to Marlowe's GRC division.

In the year to 31 December 2022, IMSM generated revenues of £12.2 million and EBITDA of £1.9 million. As at 31 July 2022, IMSM had net assets of £6.7 million. The total enterprise value will comprise an upfront cash consideration of £12.9 million and a further £3.0 million payment through the issue of 597,609 ordinary shares of 50 pence each in the capital of the Company ("Consideration Shares") in addition to an estimated £1.5 million in performance-related contingent consideration payable after the first year of ownership. The Consideration Shares are being issued to the vendor, and are locked in for a period of two years.

Alex Dacre, Chief Executive of Marlowe plc, said:

"The acquisition of IMSM broadens the capabilities of our Governance Risk and Compliance division into the attractive and highly complementary ISO auditing and certification market. This is a large and fragmented market, and the addition of IMSM will enable us to address a core component of our clients' compliance requirements. This acquisition is consistent with our strategy to selectively execute on bolt-on acquisitions whilst maintaining leverage in the region of 2x EBITDA, within the Board's guided range."

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About Marlowe plc

Marlowe is a leader in business-critical services and software which assure regulatory compliance. The company was formed to create sustainable shareholder value through the acquisition and development of businesses that provide regulated safety and compliance services and software. It is focused on compliance software, eLearning, health & safety, employment law & HR compliance, fire safety & security, water & air hygiene and occupational health services - all of which are vital to the wellbeing of its customers operations and are invariably governed by regulation. Marlowe currently provides software to over 1 million users and services to over 25% of Britain's commercial premises. The Group provides customers with a single outsourced, nationwide, provider of a range of regulated compliance and safety solutions. Our customers can be found in office complexes, high streets & leisure facilities, manufacturing plants and industrial estates, and include thousands of SMEs, local authorities, facilities management providers, multi-site NHS trusts and FTSE 100 companies.