REG - Eleco PLC - Acquisition of BestOutcome

ElecoAnnouncement

27/06/2023 07:15

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RNS Number : 9688D  Eleco PLC  27 June 2023

27  June 2023

Eleco Plc

("Eleco", "Group" or the "Company")

 

Acquisition of BestOutcome

 

The Board of Eleco Plc (AIM: ELCO), the AIM-listed specialist software
provider for the built environment, is pleased to announce that it has
acquired 100% of Buckinghamshire-based BestOutcome Limited ("BestOutcome"),
a profitable, high quality SaaS business and leading UK provider of simple,
scalable Project Portfolio Management (PPM) software, for an initial
consideration of £4.825m in cash (an adjusted initial value of £3.525m on a
cash-and-debt-free equivalent) ("the Acquisition"). The Acquisition will be
exclusively financed by the Company's internal cash resources.

 

Strategic Highlights

·    The Acquisition strengthens Eleco's Building Lifecyle portfolio,
representing further progress in Eleco's growth strategy to enhance its
predictable recurring revenue and to increase value to its shareholders by
investing in synergistic software products and technologies.

·    The Board of Eleco anticipates that the Acquisition will enhance
both annualised recurring revenue and earnings in the second half of the year
ending 31 December 2023 and beyond.

·    BestOutcome's core products PM3 and PM3 Time are used to manage
strategic programmes and multiple portfolio management projects.

·    BestOutcome's 22 strong team services a nationwide customer base
of over 60 active customers and has a particular strength in winning public
sector business, including the NHS, universities and county councils.  This
gives Eleco a greater foothold in the wider built environment, while also
complementing its private sector exposure.

 

Transaction Highlights

·    The transaction includes a potential deferred consideration of £0.5m
subject to the BestOutcome management team attaining specific performance
targets in 2023 and 2024.

·    This makes the total potential consideration to be £5.325m (an
adjusted total potential consideration of £4.025m on a cash-and-debt-free
equivalent).

·    BestOutcome reported (SaaS-related) revenues of £2.0m for the
year to 31 December 2022, and profit before tax of £0.2m, before alignment
with Eleco Group Generally Accepted Accounting Principles.

·    Unaudited management accounts of BestOutcome for the first five
months of 2023 show revenue of approximately £0.9m and profit before tax
of circa £0.2m, before alignment with Eleco Group Generally Accepted
Accounting Principles.

·    Cash as at end of May totalled £1.3m.

·    BestOutcome will continue to operate under its own brand, known as
'BestOutcome, an Elecosoft company'.

 

 

Jonathan Hunter, Chief Executive Officer of Eleco plc, said:

"The acquisition of BestOutcome represents another milestone in the
development of Eleco as a leading provider of world-class software solutions
to the built environment. The addition of BestOutcome's simple, well
designed, scalable PM3 portfolio management SaaS software to Eleco's existing
software portfolio will enable Eleco to meet the needs of a diverse audience
in the built environment.

 

The incumbent directors and owners of BestOutcome have reinvested profits into
building a world-class team and ensuring that the business is well-governed,
achieving certification as a Great Place to Work® Cyber Essentials Plus and
ISO27001 accreditation.  The investment in research and development, through
doubling its development team over the last few years,  makes it stand out
amongst its peers as a highly secure and practical solution for planning and
managing programmes for customers in public and private sectors.

 

We look forward to working with our new colleagues as we solve the challenges
of the built environment together".

For the purposes of Article 7 of EU Regulation 596/2014, this announcement
contains inside information.

 

 

For further information, please contact:

 Eleco plc                                                    +44 (0)20 7422 8000
 Jonathan Hunter, Chief Executive Officer
 Neil Pritchard, Chief Financial Officer

 finnCap Limited                                              +44 (0)20 7220 0500
 Geoff Nash/ Emily Watts/ Seamus Fricker (Corporate Finance)
 Charlotte Sutcliffe / Harriet Ward (ECM)

 SEC Newgate UK                                               +44 (0)20 3757 6882
 Elisabeth Cowell/Bob Huxford                                 eleco@secnewgate.co.uk (mailto:eleco@secnewgate.co.uk)

 

About Eleco plc

Eleco plc is an AIM-listed (AIM: ELCO) specialist international provider of
software and related services to the built environment through its operating
brands Elecosoft and Veeuze from centres of excellence in the UK, Sweden,
Germany, the Netherlands and the US.

 

The Company's software solutions are trusted by international customers and
used throughout the building lifecycle from early planning and design stages
to construction, interior fit out, asset management and facilities management
to support project management, estimation, visualisation, Building Information
Modelling (BIM) and property management.

 

For further information please visit www.eleco.com
(http://www.elecosoft.com/) .

 

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