TIDMIMO
RNS Number : 3076Z
IMImobile PLC
17 September 2015
For Immediate Release 17th September 2015
IMImobile PLC
("IMImobile" or "the Company" or "the Group")
Acquisition of Archer Digital (South Africa) and Trading
Update
IMImobile (AIM:IMO), the London based global technology company
which provides software and services for enterprise mobile
engagement, is pleased to announce that it has agreed to acquire
Archer Digital Limited ("Archer") an established leading provider
of mobile engagement solutions in South Africa.
For over 10 years, Archer has delivered critical consumer
communications over mobile channels on behalf of leading banks,
utilities and government. Products include personalised mobile
statements, mobile marketing and customer service messaging and are
considered highly complementary to the existing IMImobile
offering.
Management considers the acquisition of Archer to be highly
strategic with significant opportunities to leverage IMImobile's
African footprint to expand into the wider enterprise market.
The consideration, all payable in cash, consists of an initial
consideration of $5.2m and a deferred consideration payment of up
to $0.4m payable 90 days after completion.
After taking into account investment in integration and sales
and marketing expenses, the company expects the acquisition to be
earnings neutral in the current year and earnings enhancing
thereafter.
Highlights:
Acquisition
-- Archer delivers critical consumer communications over mobile
channels on behalf of leading banks, utilities and government.
Products include personalised mobile statements, mobile marketing
and customer service messaging.
-- Archer is based in Johannesburg, South Africa and employs over 50 staff.
-- Revenues have grown at CAGR of 26% over the last four years.
Revenue and adjusted profit after tax of ZAR117m (GBP5.5m) and
ZAR11m (GBP0.5m), respectively, were reported for the year ending
31 December 2014. At 31 December 2014 Archer had net assets of
GBP1.2m.
-- Significant opportunities to leverage IMImobile's African
mobile operator and operational footprint to expand into the wider
African enterprise market.
-- Complementary to existing IMImobile offering providing
significant cross-sell and lead generation opportunities.
-- The Company expects to invest in integration and sales and
marketing during FY2016 and anticipates the acquisition to be
enhancing to earnings in FY2017 and beyond.
Trading update
-- Trading for the six months ended 30 September in line with directors' expectations.
-- Investment in sales, marketing and product development
activities will be increased in the second half of the financial
year to accelerate growth in future periods.
-- Board highly confident of enlarged Group prospects and
achieving full year market expectations.
Commenting on the Acquisition Jay Patel, Chief Executive Officer
of IMImobile said:
"We see tremendous opportunities in Africa for enterprises to
use mobile as a communication channel driven by the explosion of
mobile devices and better networks as well as the limitations of
the physical infrastructure. Archer has been successfully working
with leading blue chip clients over many years and we believe that
combined with IMImobile's software and solutions we will be able to
leverage the existing client relationships and extensive experience
of the Archer team to seize this great opportunity."
Background and reasons for the Acquisition
Over the next seven years mobile operators are planning to spend
$100bn in expanding their coverage and capacity across sub-Saharan
Africa and smartphone penetration is expected to grow from 72
million in 2013 to 525 million in 2020 according to the GSMA. As
there is also limited physical infrastructure across Africa the
addressable market for mobile engagement solutions will become more
substantial as large enterprises embrace mobile as the major
channel for customer communication.
Archer is an established leading provider of patented mobile
engagement solutions in South Africa, working with mainly large
customers, from various sectors including banking, government
municipalities, satellite services, retail and mobile operators.
Archer's key products and services include mobile bank and credit
statements, billing reminders and payment transaction services.
The acquisition of Archer further enhances IMImobile's footprint
across the region adding new customers across key verticals
alongside existing mobile operator clients. Archer's products will
be integrated and offered as part of IMImobile's international
portfolio of enterprise mobile engagement solutions.
The experienced management and operational team within Archer is
another key attraction for the transaction. They have successfully
built and consistently grown a profitable business in South Africa
serving blue chip clients for whom excellence in customer
communications is expected. The team also adds a creative
capability to IMImobile's broader offering.
Archer fits well with IMImobile's approach of acquiring access
to customers, profits and positive cash flow, and helps strengthen
the company's position to exploit the enormous opportunities
presented by the Africa market.
Post-Acquisition Integration
The directors believe that Archer's platform and services
offering will integrate into the existing IMImobile platform. The
Group will utilise Archer's existing infrastructure and presence in
the South Africa market to expand the penetration of its global
portfolio of enterprise products across the region, while enabling
Archer's technology and products to be offered to new international
markets outside of South Africa as part of IMImobile's global
operation.
Terms of the Acquisition
The maximum total consideration for the acquisition is $5.6m
comprising an initial consideration of $5.2m payable in cash with a
deferred payment of up to a maximum of $0.4m in cash. The
consideration will be met from the Group's existing cash resources.
Archer is debt free.
In order to retain and incentivise the existing Archer
management team and to satisfy black economic empowerment
regulatory requirements in South Africa, the management team will
be able to earn up to 20% of the equity of Archer, and a further
10% is expected to be sold to a minority investor shortly after
completion.
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. We
continue to see opportunities for growth and will be increasing
investment in the second half of the year in sales, marketing and
product development in order to accelerate growth in future
periods.
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
2016.
For further information please contact:
IMImobile PLC c/o Buchanan
Jay Patel, Chief Executive Officer Tel: +44 (0)20
Mike Jefferies, Group Finance 7466 5000
Director
Buchanan - Financial PR adviser Tel: +44 (0)20
Mark Edwards / Gabriella Clinkard 7466 5000
/ Stephanie Watson imimobile@buchanan.uk.com
SPARK Advisory Partners - Nominated Tel: +44 (0)203
adviser 368 3550
Matt Davis / Sean Wyndham-Quin
Whitman Howard - Joint Broker
Ranald McGregor-Smith / Niall Tel: +44 (0)207
Devins 659 1234
WH Ireland - Joint Broker Tel: +44 (0)20
Adrian Hadden 7220 1666
About IMImobile PLC
IMImobile is a leading provider of software and services for
mobile engagement. Its products and services, delivered in over 60
countries help its clients to communicate and transact with their
customers more effectively on mobile devices. The Company's
solutions allow customers to use mobile as a channel to create new
revenue streams, as a CRM and customer engagement channel, and as a
channel to improve business operations.
IMImobile's suite of products is 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 regional head
offices in Hyderabad, Atlanta and Dubai and has approximately 690
employees worldwide.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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September 17, 2015 02:00 ET (06:00 GMT)
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