REG - Eleco PLC - Acquisition of Vertical Digital

ElecoAnnouncement

16/04/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240416:nRSP7121Ka&default-theme=true

RNS Number : 7121K  Eleco PLC  16 April 2024

16 April 2024

Eleco Plc

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

 

Acquisition of Vertical Digital

 

The Board of Eleco plc (AIM: ELCO), the specialist software provider for the
built environment, is pleased to announce that its wholly owned subsidiary
Elecosoft Ltd has acquired 100% of the share capital of Vertical Digital group
of companies, consisting of Vertical Digital SRL and Sons of Coding SRL (the
Acquisition or Vertical Digital) for an initial consideration of €1.3m
(c£1.1m), exclusively financed by the Company's internal cash resources.

 

Vertical Digital has a proven track record, in providing agile and innovative
software development, technical consulting and upskilling solutions across
many European and multinational end-customers including Lufthansa Technik,
PwC, VW Financial Services, Deloitte and Zoopla.

 

The Acquisition will add critical capabilities to Eleco, including the ability
to service and scale its customers by connecting systems and providing
technical consulting which will support their digital transformation
 journeys, thus increasing the Group's product breadth and focus on customer
centricity.

 

The Acquisition will also provide for elastic augmentation of our internal
research and development capacity which will further improve product time to
value.

 

Vertical Digital meets Eleco's acquisition criteria, having an established
track record with the ability to deliver on common customer needs, enhance
product digitalisation and advance Eleco's roadmap.  In the year to 31
December 2023, Vertical Digital delivered revenue of €1.2m (c.£1.0m) and a
net profit before taxation of €0.3m (c.£0.2m) based on unaudited figures
and Vertical Digital's accounting policies.

 

The transaction terms provide for a cumulative potential deferred and
contingent outflow (Earn Out) of a maximum total of €250,000 payable in
2026, based on the Vertical Digital business attaining specific revenue and
profitability performance targets set by Eleco plc during the financial years
ending 31 December 2024 and 31 December 2025.

 

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

 

"We are pleased to welcome Vertical Digital to the Group, which will
accelerate our ability to support our customers in solving the challenges they
are face in delivering their digital transformation strategies.  Eleco is now
better positioned to provide a broader range of solutions and engage with more
of its customers and partners on their strategic technological direction.

 

We are impressed with the calibre of customers that Vertical Digital have
serviced and the experience and talent of our new colleagues.  In addition,
we are delighted that the two founders of Vertical Digital are committed to
supporting the growth ambitions of the Group. Dan Pop will be responsible for
expansion in Eastern Europe as Regional Managing Director, Eastern Europe and
Alex Gheboianu will ensure the Group continues to innovate and retain
world-class technical talent as Chief Technology Officer.

 

Vertical Digital expands Eleco's capabilities and increases the opportunities
available to the Group and we look forward to the future with confidence."

 

For the purposes of Article 7 of EU Regulation 596/2014, this announcement is
deemed to contain inside information.

 

 

For further information, please contact:

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

 Cavendish Capital Markets  Limited                           +44 (0)20 7220 0500
 Geoff Nash/ Emily Watts/ Seamus Fricker (Corporate Finance)
 Louise Talbot/ Tim Redfern/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, BestOutcome and Veeuze from centres of excellence in the UK,
Sweden, Germany, the Netherlands, Romania 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/) .

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQIAMTTMTMBTJI