TIDMIMO
RNS Number : 0651U
IMImobile PLC
13 October 2014
13(th) October 2014
IMImobile PLC
("IMI" or "the Company" or "the Group")
Acquisition of TxtLocal Limited and Trading Update
IMI is pleased to announce that it has agreed to acquire
TxtLocal Limited ("TextLocal") an award winning self-service, cloud
based, mobile messaging business predominantly targeting small and
medium sized businesses ("SMB") in the UK. The acquisition will
further enhance IMI's product suite of smarter mobile engagement
software and strengthens the Company's position as a leading
provider of mobile communications solutions.
Highlights:
TextLocal
-- TextLocal's best-in class platform for SMBs' messaging
solutions has served over 100,000 businesses since its foundation
in 2005 with a 95% customer satisfaction rating.
-- Initial consideration of GBP10m cash and GBP1m by way of IMI
shares. Deferred consideration of up to GBP2.15m.
-- Strong track record of profit and cash generation with
revenue and profit after tax of GBP7m and GBP1m, respectively, for
the year ending 30 November 2013.
-- The acquisition is expected to enhance Group earnings with
effect from the second half of the year ending 31 March 2015.
-- Complementary to existing IMI offering providing significant cross-sell and lead generation opportunities.
-- Platform to be integrated with IMI's core infrastructure with identified cost synergies.
-- Significant opportunities to leverage IMI's global footprint
to introduce TextLocal's offering into new international
markets.
Trading update
-- Trading for the six months ended 30 September in line with directors' expectations.
-- Board highly confident of achieving full year profit targets for the existing business.
Commenting on the Acquisition Jay Patel, Chief Executive Officer
of IMI said:
"The acquisition of TextLocal helps us build out our set of
smarter mobile engagement products and solutions. TextLocal has a
best-in class product that addresses the small and medium sized
businesses segments that we do not currently serve and we see
opportunities to cross-sell capabilities as well as an opportunity
to leverage our global distribution and operator relationships. We
expect to integrate the acquisition rapidly into the Group over the
next six months and we expect it to be earnings enhancing from the
second half of the current financial year ending 31 March
2015."
Background and reasons for the Acquisition
IMI believes that TextLocal has the best in class messaging
solutions platform focused on SMB's. This product suite will
complement IMI's business allowing it to target a new market
segment in the UK and roll this out internationally. The SMB sector
is forecast by many analysts to be one of the fastest growing areas
of the broader mobile messaging market. The acquisition will
provide IMI with significant cross selling opportunities and
deliver a substantial new client base.
A key attraction for IMI of the acquisition was the TextLocal
team, who have successfully developed and sold its market leading
platform with a track record of delivering revenues profits and
cash flow.
TextLocal fits well with IMI's approach of acquiring access to
customers, profits and positive cash flow, and helps strengthen the
Company's position in the UK market.
Further information on TextLocal
TextLocal is based is offices in Chester and Malvern and employs
30 people from these locations.
In the year ended 30 November 2013 TextLocal reported a turnover
of GBP7m and made a profit after taxation of GBP1m. As at 30
November 2013, being the date of TextLocal's latest published
audited financial statements, TextLocal had net assets of
GBP0.7m.
TextLocal was advised by GP Bullhound, the leading European
technology investment bank.
Post-Acquisition integration
The directors believe that TextLocal as a result of its product
suite and culture can be integrated effectively into IMI's UK
operations. Whilst not a key driver for the acquisition the board
believes that through the integration some attractive cost
synergies can be obtained. The board believes that the TextLocal
product suite and SMB intellectual property can be utilised across
the broader group and has identified significant cross selling
opportunities.
Terms of the Acquisition
The maximum total consideration for the acquisition is GBP13.15
million, comprising an initial consideration of GBP10.00 million
payable in cash, and GBP1.00 million satisfied by the issue of
707,564 ordinary shares at a price of 141.33p per share with
additional deferred payments, split over two years, of up to a
maximum of GBP2.15 million. The initial cash consideration will be
met from the Group's existing cash resources. TextLocal is debt
free and at the date of acquisition has approximately GBP1.3m of
net current assets.
The deferred consideration will be shared amongst the founders
of the business and senior management providing IMI with a
motivated and committed team to leverage TextLocal's technology
across IMI's geographic regions.
Application has been made for the shares to be allotted pursuant
to the acquisition to be admitted to AIM with such Admission
expected to take place on Friday 17th October 2014.
Trading update
Before the Group enters its close period ahead of the
announcement of its interim results expected to be in early
December the board is pleased to provide the following update on
trading.
We have made a good start to the year and trading in the first
six months has been in line with directors' expectations.
Performance in the Group's core European activities, which account
for approximately 50% of the business, has been strong with
significant gross profit growth in the region from a higher margin
mix of sales. The strong performance in Europe has been offset to
some extent by challenging trading conditions in the Group's Indian
operations which account for less than 20% of the Group's business.
The board remains highly confident about the Group's prospects for
the remainder of the year and the achievement of profit
expectations for the enlarged Group for the full year ending March
2015.
For further information please contact:
IMImobile PLC c/o Buchanan
Jay Patel, Chief Executive Officer Tel: +44 (0)20 7466
Mike Jefferies, Group Finance Director 5000
Buchanan - Financial PR adviser Tel: +44 (0)20 7466
Mark Edwards / Sophie McNulty / Gabriella 5000
Clinkard imimobile@buchanan.uk.com
SPARK Advisory Partners - Nominated adviser Tel: +44 (0)203 368
Matt Davis / Sean Wyndham-Quin 3550
Whitman Howard - Joint Broker Tel: +44 (0)20 7087
Ranald McGregor-Smith 4556
WH Ireland - Joint Broker Tel: +44 (0)20 7220
Adrian Hadden 1666
About IMImobile PLC
IMImobile is a leading global technology company providing
software and services which help businesses capitalise on the
growth in mobile communication. Its services, delivered in over 60
countries in Europe, the Americas, MEA and India, help its clients
to engage and transact with their customers more efficiently
through smarter mobile engagement. The company's solution allow
customers to use mobile as a channel to create new revenue streams,
as CRM and customer engagement channel and as a channel to improve
business operations.
IMImobile's DaVinci suite of products are modular, scalable and
delivered through cloud infrastructure which is integrated into
mobile operator networks, internet services and social media
platforms. The products and solutions have helped IMImobile
establish a blue-chip client base of leading mobile operators and
global enterprises. Key customers include Vodafone, O2, Telefonica,
Aircel, Airtel, BSNL, AT&T, MTN, France Telecom, Centrica,
Coca-Cola, Universal Music, Tata, the AA, the BBC and major
financial institutions.
The company is headquartered in London with offices in
Hyderabad, Atlanta and Dubai and has 650 employees worldwide.
IMImobile is quoted on the London Stock Exchange's AIM market with
the TIDM code IMO.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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