Acquisition of Technology Insight Corporation

RNS Number : 4386F

Glantus Holdings PLC

16 July 2021

 

16 July 2021

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR") WHICH IS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

GLANTUS HOLDINGS PLC

("Glantus" or the "Company")

ACQUISITION OF TECHNOLOGY INSIGHT CORPORATION ("TIC")

Highlights

-  Strategically significant and earnings enhancing acquisition, benefitting Glantus' IPO backers and shareholders.

-  Total consideration of up to US$9.3m.

-  Boston-based TIC will provide Glantus with an additional 37 global enterprise customers.

-  TIC brings intellectual property and 20 years of expertise and experience in Accounts Payable analytics, bolstering Glantus' strong growth in the space.

-  TIC's primary software product, Datashark, provided c. $2.6m of annual recurring revenues in 2020.

-  Addition of TIC team represents a major expansion of Glantus' US presence, adding more technical support, pre-sales capabilities and implementation processes.

-  TIC customers will be able to access more transformative AP tools through the integrated Glantus platform, such as procurement to payment, statement reconciliation, and contract compliance.

Summary

Glantus, the provider of Accounts Payable automation and analytics solutions, has acquired Technology Insight Corporation and the business and certain assets of Technology Insight Europe Limited, for a total consideration of up to US$9.3million (together, the "Acquisition"). This earnings-accretive acquisition will provide an immediate boost to the company's earnings per share, representing a major next step in the company's post-IPO growth strategy.

Technology Insights Corporation is a software solution provider into the accounts payable ("AP") departments of large, often global, enterprises. It has developed its own software solution which it has branded Datashark. TIC has been trading for over 20 years and has built up a strong annual recurring revenue base of in excess of $2.6 million in 2020 and transactional revenues of over $1.2 million in 2020. For the year ended 31 December 2020, TIC reported turnover of $3.8m and pre-tax profits of $583k.

TIC is headquartered in Boston, US, and provides IT solutions across the United States. TIC has its own intellectual property which has been developed over 20 years. Its skill and reputation around AP analytics will be of considerable benefit to Glantus and the expansion of its US technical resource team will enhance the Company's technical support, pre-sales capabilities and implementation processes in this important market.

The Acquisition offers the opportunity to cross-sell the individual technologies of each company across the combined customer base, together with an acceleration of the Company's organic growth within the existing customer base.

The vendor, Karl Anderson, is founder and CEO of TIC, who will remain within the enlarged Group as SVP of Acquisitions and Developments.

About TIC and Acquisition Rationale

TIC has 35 global customers, all of whom have a similar profile as Glantus' existing enterprise customer base, with an average annual spend in excess of an estimated $500 million. The acquisition of TIC brings Glantus' total enterprise customer base to over 80 and consolidates the Company's position in the US AP solutions market. TIC deals directly with the AP function within these organizations.

Like Glantus, TIC has two forms of revenue stream - subscription and transactional. TIC's primary software solution is an analytics product, Datashark. This product is sold on an annual license/subscription basis providing current recurring revenues of c. $2.6 million in 2020. TIC's recurring transactional revenues account for c. $1.2 million in 2020, bringing the overall current annual run rate revenues to $3.8 million in 2020. This profile of revenue is attractive to Glantus, as it continues to grow its current recurring revenue base and expand its successful subscription model.

Responding to soaring customer demand, Glantus has been an active developer of advanced AP analytics for many years. With TIC's 20 year history working in AP analytics and in-depth knowledge of its customer requirements, the Acquisition will significantly accelerate the Company's provision of an advanced AP analytics offerings to its customer base, and ensure the product is a perfect fit for its global customers' requirements. In turn, the Glantus platform will bring a more integrated solution and capability to TIC customers, offering additional products, such as procurement to payment, statement reconciliation, and contract compliance. 

Details of Agreements

-  Under the terms of the Acquisition, Glantus Inc., the Company's wholly-owned US subsidiary, has acquired TIC for a total consideration of up to $9.3m, comprised of an initial consideration of $7.75m in cash on completion, $0.4m six months after completion and $1.0m twelve months after completion.  The vendor, Karl Anderson, has also entered into a subscription agreement with the Company to subscribe $1.0m of the cash consideration received under the Acquisition in return for 913,951 new ordinary shares of €0.001 each in the Company (the "Subscription Shares"). The Subscription Shares are subject to a lock-period ending on the date of publication of the Company's annual accounts for the financial year ending 31 December 2021 and to an orderly marketing arrangement for a further period of 12 months.

-  Glantus UK Limited, the Company's wholly-owned subsidiary, has acquired the business and certain assets of Technology Insight Europe Limited for a total cash consideration of $0.15m.

The cash consideration under the Acquisition is being funded through a combination of the Company's existing cash resources and a new €5.0m loan facility from BPC Ireland Lending II Designated Activity Company ("Beachpoint Capital") on similar terms to the Company's existing Beachpoint Capital facilities.

Maurice Healy, CEO of Glantus, said: "We're delighted to be joined by the TIC team on this journey - this is the first acquisition of many that we will undertake following our successful IPO. Our goal is to become a leader in AP technology through a mix of strong organic growth and acquisition, and the addition of TIC is another key step in that exciting process.

The acquisition of TIC will provide presales, implementation, and technical support resources to the entire US team, and will make the provision of our services across the board more effective and more efficient in the US. In addition, the acquisition provides us with additional management resources, sales resources, and a greater geographic spread of customers in the US. And while there are also opportunities to reduce costs in the integrated business, it is the addition of these important resources that makes the acquisition of TIC even more compelling.

The integration of the Technology Insights (TIC) brand with that of JPD (last year's US acquisition)  under the Glantus brand,  sends a clear message to the market that Glantus is a major player in the Accounts Payable space and in the consolidation of the US market."

Karl Anderson, Founder and CEO of TIC, said: "We recognize that customers are increasingly looking at automation and AI to drive further efficiencies in their financial processes. With Glantus, we now have the advanced technology platform and the team behind us to deliver additional services to our customers."

Application and Total voting rights

Application is being made for the admission to trading on AIM ("Admission") of the 913,951 Subscription Shares. It is expected that Admission will be effect on or around 22 July 2021.

Following Admission, the total number of ordinary shares in issue will be 37,189,382, each with equal voting rights. The Company does not hold any rights in treasury. The total voting rights figure can be used by Shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change of their interest in, the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

For further Information, contact :

Glantus Holdings plc  + 353 87 061 0795

Maurice Healy, CEO

[e-mail]

Arden Partners plc

Nominated Advisor and Broker

Ruari McGirr / Richard Johnson (Corporate)  [phone]

Simon Johnson (Broking)

Flagstaff Strategic and Investor Communications

Tim Thompson  + 44 7710 718 649

Mark Edwards

Fergus Mellon

[e-mail]

Editor Notes:

Glantus (AIM:GLAN) is a global provider of Accounts Payable automation and analytics solutions. Our mission is to simplify data to drive constant innovation. The award-winning Glantus Data Platform provides an end-to-end AP solution that layers onto existing systems eliminating cost and delivering new revenue streams. Glantus has over 300 customers across more than 50 countries, including Fortune 500 brands and large multi-nationals.

 

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