Scisys Plc Acquires German space software consultancy MakaluMedia Internet & Engineering Services GmbH
SCISYS PLC, the supplier of bespoke ICT software systems, IT based business solutions and support services to the Media Broadcast, Space, Government & Defence, Environment and Applications Management sectors, today announces the acquisition of MakaluMedia Internet & Engineering Services GmbH ('MakaluMedia') a provider of software engineering and consultancy to the European space industry for Euro 2.32 million (the 'Acquisition').
Highlights of the Acquisition:
- Acquisition will enhance SCISYS' already strong franchise in the European space sector
- MakaluMedia will be integrated into SCISYS' pan-European Space division
- German space market expected to be the most buoyant part of European space market in coming years
- Consideration of Euro 2.32 million paid in cash at completion
- SCISYS expects the acquisition will be immediately earnings enhancing for the SCISYS group.
Commenting, Mike Love, Chairman of SCISYS, said:
"I am pleased that we have concluded the acquisition of MakaluMedia and welcome the employees, clients and stakeholders to SCISYS. The Acquisition is in line with our stated strategy to accelerate growth through appropriate acquisitions. The MakaluMedia business is well known by SCISYS and brings a high level of complementary technical capabilities while broadening the existing SCISYS skill set and customer base. The Board is encouraged by the pipeline of opportunities in the German space market; we look forward to integrating MakaluMedia and working together to grow our business in this sector."
MakaluMedia was founded in 1997 and was owned by two engineers (the 'Vendors') formerly working at the European Space Agency. Since then, the company has enjoyed steady growth and has built a good reputation as an effective and reliable provider of software engineering and consultancy to the European space industry. In addition to consulting services, MakaluMedia also develops and maintains advanced software systems for the space and aviation industry. MakaluMedia operates from offices in Darmstadt in Germany, close to an existing SCISYS operation, and employs a staff of 27.
The consideration for the acquisition of Euro 2.32 million remains subject to adjustment if the German GAAP net asset value at 31-Oct-2012 varies from Euro 600k. The consideration is being satisfied in cash only. The acquisition will be effected through SCISYS' wholly owned subsidiary SCISYS Deutschland GmbH.
The Vendors are no longer involved in the day to day operations. Key management and employees of MakaluMedia are being retained. In the twelve months to 31-Dec-2011, MakaluMedia achieved revenue of Euro 3.31 million and profit before tax of Euro 452k. It had gross assets of Euro 1.65 million including cash funds of Euro 321k as at 31-Dec-2011. All figures are as reported in MakaluMedia's unaudited financial statements based on German GAAP. SCISYS expects the acquisition will be immediately earnings enhancing for the SCISYS group.
MakaluMedia will be closely integrated into SCISYS' Space division with operations in UK and Germany, managed by divisional director Horst Wulf. The acquisition is attractive for the Space division, in particular with respect to its Darmstadt operations, because it will substantially expand the division's time and materials business while significantly strengthening its operations and support activities. Furthermore, the Acquisition will substantially improve the division's fixed price project delivery capability in Darmstadt and add new key clients to its existing customer base. The Board believes that the business match between the companies is very good and expects a smooth integration process retaining customers while developing the business to take advantage of the wider sales opportunities in SCISYS' Space division.
The intellectual property rights in MakaluMedia's corporate brand will remain with the Vendors, although SCISYS is entitled to use it for an interim period of up to 18 months until MakaluMedia is incorporated under SCISYS' corporate brand. The Vendors will retain the MakaluMedia brand for the use in their other interests which currently include Makalu Interactive, a consumer applications business for mobile handsets, tablets and web applications, which is separately incorporated and independent from MakaluMedia.
The acquisition is in line with SCISYS' strategy of accelerating growth with well selected acquisitions to complement the ongoing organic growth of the business.