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GETECH Group plc (GTC)

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Tuesday 14 June, 2016

GETECH Group plc

Acquisition of Exprodat Consulting Limited

RNS Number : 1403B
GETECH Group plc
14 June 2016
 

Getech Group plc

("Getech" or the "Company")

 

Acquisition of Exprodat Consulting Limited

 

 

Getech (AIM; GTC), the geoscience business specialising in the provision of data, studies and services to the oil, gas and mining exploration sectors, is pleased to announce the execution and completion of an agreement to acquire the entire issued share capital of Exprodat Consulting Limited, a company specialising in the provision of geographical information systems ("GIS") software and services to the oil and gas industry (the "Agreement").

 

Getech has previously stated a strategic aim of acquiring companies with clear commercial fit and synergies, in parallel with the strategic aim of organic growth. In April 2015 it completed the acquisition of ERCL Limited, an oil and gas consultancy based in Henley on Thames.

 

In common with its clients, Getech's work depends on the ability to manage, present and interpret geographical data. Throughout the oil and gas industry, GIS systems are used as part of the work at all stages from exploration through to production, and virtually all clients use the ArcGIS software platform, provided by ESRI.

 

Exprodat

 

Exprodat was founded in 2002 and is a London-based consultancy with 20 staff, specialising in the provision of services and consultancy relating to data management and the use of GIS systems. It provides training in both public and private environments, and has developed, and licences commercially, several software packages which support petroleum exploration.

 

It has developed a substantial client base, with a significant proportion of recurring income. For Getech, it is particularly relevant that the staff are predominantly geologists by training, giving them an understanding of the client scientific as well as data management needs.

 

Exprodat is an ESRI Gold Partner, and it has ISO 9001 certification. Each of these represents an external validation and recognition of the quality of the company's services.

 

Prior to the current market downturn which we believe started in 2014, Exprodat had a long and profitable trading history. In the year to December 2014 it reported income of £4,629,000 and profit before tax of £107,000. However, with the worsening state of the market and exceptional costs in 2015, Exprodat's most recent accounts to December 2015 are expected to report income of £3,419,000 and a loss before tax of £109,000. However, the 2015 result is stated after the impact of one-off restructuring expenses in December to reduce its ongoing costs.

 

Getech will acquire Exprodat from its existing shareholders Gareth Smith, Nicholas Cribbens, Christopher Jepps, Julie Cullen and Ross Smail.

 

The Directors believe that the enlarged Getech group will deliver a number of synergies, both in relation to internal group performance and in terms of the products and services provided to our clients.

 

The terms of the Agreement

 

Getech will pay consideration as follows:

 

·     A cash payment equal to the value by which net assets exceed £500,000 payable in two instalments, as follows:

 

£250,000 immediately on completion

the balance on 14 January 2017

 

·     The issue of 4,666,667 Getech shares ("New Shares").  Application will be made to admit these shares to trading on AIM and it is anticipated that trading in the shares will commence on 20 June 2016. It is agreed that the shares will be retained by the Exprodat shareholders for a minimum period of one year from completion.

 

On this basis, using the closing share price on Monday 13 June 2016, the aggregate potential consideration will be valued at £1,760,000.

 

Exprodat's gross assets total £1,570,000 with net assets of £1,008,000.

 

There are no shares held in treasury, therefore the total number of voting rights in the Company following the issue of the New Shares will be 37,562,415. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest under the Disclosure and Transparency Rules.

 

Immediately following completion, Gareth Smith, Nicholas Cribbens, Christopher Jepps, Julie Cullen and Ross Smail will be interested in the capital of the Company as follows:

 


Existing ordinary shares

Ordinary shares issued on completion

% issued share capital

Gareth Smith

                                        -

1,430,108

3.81%

Nicholas Cribbens

                                        -

1,430,108

3.81%

Christopher Jepps

                                        -

903,226

2.40%

Julie Cullen

                                        -

677,419

1.80%

Ross Smail

                                        -

225,806

0.60%


                                        -

4,666,667

12.42%

 

 

Stuart Paton, Chairman of Getech Group plc, said: "We are delighted that we have completed the transaction with Exprodat. We see a very strong strategic fit and believe that this will enable the enlarged group to provide improved products, services, software and training more broadly across client workflows in the petroleum sector. Exprodat also brings skills which are directly applicable outside the petroleum industry, providing the potential for the group to extend into other markets. The enlarged group will have a strong asset base, a broader range of skills and products, and enhanced potential to take advantage of a market recovery."

 

 

Enquiries:

 

Getech Group plc

Raymond Wolfson, Chief Executive

 

Tel:  0113 322 2200

WH Ireland Limited

Katy Mitchell

Tel:  0161 832 2174

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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