Acquisition

Xchanging plc acquires

US e-Sourcing specialist MarketMaker4

expanding the technology offering of its Procurement Services business

Xchanging plc ("Xchanging"), the business process, procurement and technology services provider, today announces that its subsidiary, Xchanging Inc. has acquired 100% of the share capital of SBB Services Inc., trading as MarketMaker4 ("MM4"), an e-Sourcing Software-as-a-Service provider based in the USA.

MM4 adds a strong technology capability, with extensive experience in e-Sourcing, online auctions, market intelligence, strategic sourcing, and supply chain consulting, to complement Xchanging's existing Procurement business. The acquisition will enable Xchanging to engage directly in the e-Sourcing segment of the procurement market. In addition, MM4's strong, referenceable customer base in the USA and other countries provides Xchanging with opportunities for its portfolio of products and services.

The acquisition contributes to Xchanging's technology-enablement strategy and expands the breadth of procurement services Xchanging offers. Xchanging is ranked No. 3 in the procurement outsourcing market place by Everest*. The acquisition will help to build the company's presence in the large US market, further consolidating this position.

Xchanging will pay a potential total consideration of up to US$22 million, paid as an initial consideration of US$11 million, in cash, on contract signing, with further payments totalling up to US$11 million payable between 2014 and 2016, contingent upon MM4 achieving defined milestone performance criteria. The transaction adds a higher margin business to Xchanging's Procurement Services and is value enhancing both for the Procurement Services business as well as for Xchanging overall. The three founding shareholding directors of MM4 will remain with the business.

Ken Lever, Xchanging Chief Executive, commented: "I am very pleased to announce the acquisition of MM4. This is the kind of bolt-on technology acquisition that fits perfectly with our strategy, bringing higher value and differentiation to our offerings. Following a number of recent contract wins in the US market, this acquisition also helps us further build our position in this important market."

Chirag Shah, MM4 Co-Founder and Chairman, said:" In the space of only a few years, MM4 has become well established in the corporate procurement market, particularly in the US. Being part of Xchanging, who first came to us as a customer, will provide the opportunity and the resources to accelerate our growth and allow MM4 to play a leadership role in the Spend Management sector."

*Everest: Procurement Outsourcing (PO) - Annual Report 2013: Expertise and Technology Driving Growth

Enquiries

David Bauernfeind, Chief Financial Officer

Alexandra Hockenhull, Director of Corporate Communications

and Investor Relations

Brian Hudspith

Emma Burdett

Dan Yea

Editors' Notes

Headquartered in Chicago, and with a presence also in London, China and Dubai, MM4 was founded in 2011 by Chirag Shah, Dave Bowen and Alan Buxton. The company has a customer base in excess of 35 companies across an international spread of countries including the US, Canada, Mexico, China and the UK. MM4 offers a web-based platform and a largely subscription-based revenue model. Following the acquisition, MM4 will retain its name and branding, which are well established in its market.

E-Sourcing technology creates a marketplace by bringing sellers together in a single place so that a buyer can easily buy what they want at the best 'market' price. Using e-Sourcing technology, an organisation can define what they are looking to buy and invite suppliers to quote a price and service level to meet the requirements. The automation brought by e-Sourcing technology allows the buyer to communicate with all bidders en masse, instigate real-time auctions, conduct security checks on suppliers and benchmark quotes against commodity trends.

www.mm4.com

Xchanging

What we are

Xchanging provides business processing, technology and procurement services internationally for customers across multiple industries.

What we do

Xchanging brings innovation, thought leadership and passion to its customers' businesses so as to enhance performance and value. Our values are embedded into everything we do.

What we want to be

Xchanging wants to be regarded as the best provider in its chosen markets by delivering services that are recognised for outstanding quality, reliability and innovation.

www.xchanging.com

@XchangingGroup

Linkedin/company/xchanging

Cautionary Statement: 

This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Xchanging's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approval or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.