Deals
Dillistone Group Plc Acquires ISV Software Limited
Dillistone Group Plc, the AIM quoted supplier of software and services for the recruitment sector, is pleased to announce that on 29 September 2014 it signed an agreement to acquire ISV Software Limited ("ISV" or the "Acquisition") and that today WH Ireland will complete a placing on behalf of Dillistone of 526,316 new ordinary shares of 5p each in the share capital of Dillistone ("Placing Shares") to raise £500,000 (before expenses) at a price of 95p per Placing Share, subject only to admission of the Placing Shares to trading on AIM ("Placing"). The Company has also announced its interim results today and these are included in a separate RNS.
ISV
ISV (www.isvgroup.com) is a UK based supplier of training and testing services, primarily to the recruitment industry. ISV works with 9 of the 10 largest recruitment agencies in the UK (by office numbers) and 7 of the 10 largest by revenue. It offers over 200 published materials/tests covering many business sectors and over 500,000 tests were carried out in 2013 for over 300 clients.
For the year ended 31 December 2013 the unaudited accounts of ISV showed profit before tax and profit after tax of £162,000 and £159,000 respectively on revenues of £750,000. These accounts also showed net assets of £256,000 as at 31 December 2013.
Consideration
On Completion, an initial consideration of £0.85m in cash ("Initial Cash Consideration") will be payable by the Company. A further payment of £150,000 will be payable on 15 January and it has been agreed that surplus cash (calculated as the amount of cash in ISV at 30 September less £150,000 plus any debtors in excess of £65,000) will also be paid out.
In addition, a deferred cash consideration of approximately 30% of net revenues arising in the 3 years to 30 September 2017 will be payable in 4 tranches with the first payment due in February 2015. It is currently anticipated that any earn-out consideration will be paid from the Group's existing cash resources. The maximum total consideration payable under the agreement is capped at £2,500,000.
Placing
The Company has raised £500,000 (before expenses) through the successful placing of 526,316 Ordinary Shares at 95p per share to a new institutional shareholder. The proceeds of the Placing will be used to pay part of the Initial Cash Consideration with the remainder of the Initial Cash Consideration and professional fees and expenses and costs in connection with the Acquisition and the Placing being paid from the Company's existing cash resources. A bank loan for £500,000 is expected to be put in place shortly after completion. It is anticipated that any earn-out consideration will also be paid from the Company's own cash resources. The Company also expects to carry out a further placing of a similar size and at a similar price for working capital purposes shortly.
Admission to AIM
Application has been made to the London Stock Exchange plc for the Placing Shares to be admitted to trading on AIM. It is expected that admission will take place and dealings in the Placing Shares will commence on 3 October 2014. The Placing Shares will rank pari passu with the existing Ordinary Shares.
Laurie Dobson, departing CEO and former majority owner of ISV Software, said:"Over the years, I have received a number of approaches from potential buyers, and deciding to sell ISV was not a decision I took lightly. I am delighted the company has been acquired by Dillistone Group. We have similar values, and the plan is to invest in and continue to grow ISV. I am leaving behind a strong management team and excellent client relationships, so the future is in good hands."
Jason Starr, Group Chief Executive of Dillistone added: "We are delighted to be welcoming the ISV team to our Group. They bring a terrific product, a great team and an impressive portfolio of clients and we really believe that bringing them into our Group will benefit all parties,"
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