Acquisition

RNS Number : 8505I

Dillistone Group PLC

09 July 2013

 



9 July 2013

Dillistone Group Plc

("Dillistone" or the "Group")

Acquisition

Dillistone, the AIM quoted supplier of software to the recruitment industry is pleased to announce that on 8 July 2013 it completed the acquisition of FCP Internet Holdings Limited ("Holdings").

The acquisition is consistent with Dillistone's strategy of enhancing strength and achieving scale through acting as a consolidator in a largely fragmented market.

Holdings is a non-trading holding company. Its wholly owned subsidiary and sole asset, FCP Internet Limited ("FCP") (www.evolvedb.co.uk/), sells its Evolve software product to its target market of recruitment agencies.  This product, which is wholly delivered through a Software as a Service ("SaaS") model, is designed to facilitate the filling of temporary or permanent vacancies and is used by hundreds of users around the World.  FCP operates in the same market sector as the Group's Voyager Software business and is UK based.

For the year ended 31 October 2012 the unaudited statutory accounts of FCP showed revenues of £941,297, and an underlying profit before tax of £171,056.  Net assets at 31 October 2012 amounted to £189,138.

The unaudited non consolidated accounts for Holdings for the period ended 31 October 2012 showed net assets at that date were £1,680. Holdings did not trade in the period and therefore had nil revenue and profit. Prior to the acquisition, Holdings sold its compliance software subsidiary NowWeComply Limited ("NWC").

FCP will become part of the Group's Voyager Software division, and it is anticipated that considerable synergies will be achieved as a result of the acquisition.  All staff, with the exception of the departing Directors, Nick John, Ben Stoneham and Stephen Bullock (NED), are expected to remain in the Group. 

FCP and Dillistone share a common culture and belief that the market will ultimately be driven by suppliers with sufficient scale to support ongoing investment in product development and customer service, with a global reach to match the evolving needs of recruitment companies. 

The Voyager Software division itself was created as a result of the Group's stated strategy, with the acquisition of Woodcote Software Ltd in September 2011.  Since this date, Voyager Software has grown its headcount by almost 20%, launched a new version of its software, Voyager Infinity, in September 2012, and signed over 100 new clients.  This further investment in FCP illustrates the Group's commitment to delivering on its growth agenda.

On completion, an initial consideration of £750,000 in cash was paid by the Group.  It has also been agreed that any surplus cash in the business, up to a maximum of £150,000 will be paid to the vendors. 

A deferred cash consideration of up to £1,200,000 is payable subject to the achievement by FCP of various recurring revenue targets over the period ending 31 March 2015. It is currently anticipated that any earn-out consideration will also be paid from the Group's existing cash resources, and the company remains debt free.

Nick John, the departing Chief Executive of Holdings commented: "We are very pleased to have completed this deal with Dillistone.  Although we have had a number of more lucrative offers from potential buyers, we were always very clear that we would only sell to an acquirer that would offer an acceptable level of service to our clients.  Dillistone Group has a commitment to customer service which mirrors our own, and the financial and technical strength to ensure that this will be a good move for all those recruiting firms who depend on Evolve, day in day out."

Jason Starr, Group Chief Executive of Dillistone added: "We are delighted to have secured the acquisition of FCP Internet.  We believe that this deal will be beneficial for the staff and clients of FCP Internet and of our existing businesses, as well as being immediately earnings enhancing for our Shareholders. We are very excited by the Group's prospects following this acquisition."

Enquiries:

Dillistone Group Plc
Mike Love	Chairman	020 7749 6100
Jason Starr	Chief Executive	020 7749 6100
Julie Pomeroy	Finance Director	020 7749 6100
WH Ireland Limited (Nominated adviser)
Chris Fielding	Head of Corporate Finance	020 7220 1650
Winningtons
Tom Cooper / Paul Vann		020 3176 4722
		0797 122 1972
		[e-mail]

Notes to Editors:

Dillistone Group Plc (www.dillistonegroup.com) is a leader in the supply and support of recruitment software. It has two main trading divisions Dillistone Systems, which targets the executive search industry (www.dillistone.com) and Voyager Software which targets other recruitment markets (www.voyage.co.uk).

Dillistone is pursuing an organic and acquisitive growth strategy whilst continuing to reward shareholders through a progressive dividend policy.  In September 2011 the Group acquired Voyager Software and in July 2013 it acquired the FCP Internet business which sells the Evolve Software product (www.evolvedb.co.uk).   This strategy targets enhancing strength and achieving scale through acting as a consolidator in a largely fragmented market; complementing the Group's commitment to sustained investment in product development and client service. 

Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006.

 

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