RWS Holdings plc Acquires inovia Holdings Pty Limited
RWS Holdings plc (RWS), Europe's leading provider of intellectual property support services (patent translation and filing as well as patent searches) and commercial translations, is pleased to announce the completion of its acquisition of inovia Holdings Pty Limited (inovia), a leading provider of web-based international patent filing solutions.
RWS previously acquired an initial one third interest in inovia, in September 2011, for US$ 5.8 million. It has now acquired the remaining two thirds for a further US$23.3m following an earnout arrangement. At completion inovia had net assets of US$1m.
The acquisition is in line with RWS's stated strategy to complement organic growth by deploying its cash resources for selective acquisitions which have demonstrable growth prospects in closely related sectors, and the capacity to enhance shareholder value.
Headquartered in New York, inovia is the largest non-law firm provider of international patent filing solutions globally. Its patented, web-based technology provides over 1000 law firms and corporate clients with cost effective processing of international patent applications, typically producing cost savings in excess of 30%. From its locations in the US, Australia and Europe, its patent filing service covers 124 countries.
The earnout arrangement comprised three elements: inovia's sales, its EBITDA and the translation work which the inovia system directed to RWS. The reference period for the earnout was inovia's financial year ended 30 June 2013. Gross revenues were US$26.5m, an increase of 37% over 2012, with much enhanced momentum in the final quarter, as the latest version of its technical platform gained traction. EBITDA was US$2.7 million and taken together with the margin RWS achieved on inovia transferred work, the earnout has comfortably exceeded our expectations. In the current financial year of RWS, inovia is its largest customer, thus underlining the strategic importance of the acquisition.
Executive Chairman Andrew Brode commented:
"We are delighted to have completed the acquisition of inovia, as originally planned. inovia's excellent proprietary technology platform has added a highly complementary and scaleable service to our existing patent translation, filing and search activities.
"This transaction will be immediately earnings enhancing, and we are looking forward to building upon the excellent momentum achieved by the inovia management, particularly in their final quarter."