REG - Elixirr Intnl PLC - Acquisition of Insigniam LLC and Insigniam SAS

Elixirr InternationalAnnouncement

11/12/2023 07:15

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RNS Number : 2566W  Elixirr International PLC  11 December 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED.

8 December 2023

 

ELIXIRR INTERNATIONAL PLC

 

Acquisition of Insigniam LLC and Insigniam SAS.

Elixirr International plc (AIM: ELIX) ("Elixirr", the "Company" and together
with its subsidiaries, the "Group"), the established, global award-winning
challenger consultancy, is pleased to announce the acquisition by its US
subsidiary, Elixirr, Inc. of all of the issued and outstanding membership
interests of Insigniam LLC ("Insigniam LLC"), and by Elixirr International
plc, of the entire issued and outstanding shares of Insigniam SAS ("Insigniam
Performance", and together with Insigniam LLC, "Insigniam"), for a maximum
consideration payable of US$18.5 million (the "Consideration") (the
"Acquisition").

 

Acquisition highlights

 

·     Insigniam is a US-headquartered consultancy firm with 50+ personnel
specialising in supporting clients and executives to define and navigate large
scale change and transformation.

·    This is the Group's fifth acquisition since its IPO in July 2020 and
third in the US, enhancing the Group's presence in this key market.

·    In the 12 months to November 2023 (unaudited), Insigniam recorded
revenue of US$13.7m, normalised EBITDA of US$2.3m and normalised profit before
tax of US$2.3m.

·    The initial consideration represents a multiple of 5.7x 2023 LTM
EBITDA, based off November 2023 LTM financials (unaudited).

·     The transaction is immediately earnings-enhancing.

·   The Acquisition brings specialist services in transformation, leadership
alignment, cultural change, and executive coaching, complementing the Group's
existing service offerings.

·     In addition to an expansion of capabilities, Insigniam has deep
expertise in additive industries for Elixirr, and in particular has built a
reputation as market leaders within industries such as healthcare,
biopharmaceuticals, life sciences, consumer and retail. Insigniam also has a
significant presence and client-base in continental Europe, complementing the
Group's presence in this region.

·    Insigniam's top clients include Fortune 500 companies and household
brands, many of which are maintained through the leadership's long-standing
relationships with the C-suite, coupled with its unique service offering.

·   During due diligence and client interviews, Insigniam was found to be
rated 43% better than their competition and has an NPS score of 66 - 85% of
its clients report that Insigniam provides more value than any other
consulting firm. Together with Insigniam, Elixirr will be able to enhance its
existing service offering to its global client base.

·    The US acquisition goodwill will be tax-deductible, resulting in an
estimated tax benefit of US$2.8m-$4.3m to be realised over 15 years.

 

Information on Insigniam and reasons for the Acquisition

 

Insigniam helps companies navigate large-scale, complex change and
transformation. Its offering includes leadership alignment, organisational
transformation, cultural change and executive coaching, and its unique
methodologies are used to break down performance barriers for C-suite teams
across industries. Insigniam operates within a broadly unaddressed and
in-demand white space in the market, through a dual focus on catalysing
breakthrough change and achieving return on investment. This distinctive
market opportunity is a key reason for the acquisition, especially when
coupled with Insigniam's proven success at delivering for clients over its 35+
year history. Elixirr leadership believes that both firms' blue-chip clients
stand to benefit from a joint proposition between Insigniam and Elixirr.

Insigniam was co-founded by Shideh Sedgh Bina and Nathan Owen Rosenberg, both
of whom will continue to spearhead the growth of the business alongside
Elixirr moving forward. Shideh and Nathan will join the Group as Elixirr
partners, alongside Katerin Le Folcalvez and Jennifer Zimmer.

In the 12 months to November 2023 (unaudited), Insigniam recorded revenue of
US$13.7m, normalised EBITDA of US$2.3m and normalised profit before tax of
US$2.3m.

 

Consideration for the Acquisition

 

The Group acquired Insigniam for a maximum consideration payable of US$18.5
million. The Consideration consists of:

 

-     Initial consideration of US$11.6 million, from Elixirr's existing
cash balances;

-     Initial consideration of US$1.5 million to be settled through the
issue in December 2023 of 258,553 Elixirr International plc Ordinary shares at
a price per share of £4.60 by 15 December 2023; and

-     Deferred consideration of up to US$5.4 million in either cash or
Ordinary Shares of Elixirr with, at a minimum, 33% of the deferred
consideration being satisfied in cash. This is contingent on Insigniam
achieving both revenue growth and EBITDA margin targets in financial periods
up to 31 December 2026.

 

Based off November 2023 LTM financials (unaudited), this constitutes a Day 1
EV/EBITDA multiple of 5.7x, and a maximum EV/EBITDA multiple of 8.1x if all
deferred consideration is earned over the three year period.

 

The Ordinary Shares will be subject to one-year lock-in arrangements and
limitations on the Ordinary Shares that each seller can sell in each of the
following three years under nominee agreements.

Following the acquisition of Insigniam, Elixirr will have net cash of
approximately £13.5 million.

 

Partner Promotions

As part of its strategy to align incentives for senior personnel, Elixirr is
pleased to announce that three recently promoted Partners will each be
subscribing for 107,527 Ordinary Shares in the Company at a £4.65 share
price. The Ordinary Shares issued to the new Partners will be subject to
one-year lock-in arrangements and limitations on the Ordinary Shares that each
Partner can sell in each of the following four years. In total, Elixirr will
issue an additional 322,581 Ordinary Shares to promoted Partners.

 

Admission and Total Voting Rights

As referred to above, in total Elixirr will issue 581,134 Ordinary Shares
("New Shares"). The New Shares will rank pari passu with the Company's
existing issued Ordinary Shares. The New Shares will be issued pursuant to the
Company's existing outstanding shareholder authorities. Application will be
made to the London Stock Exchange for the New Shares to be admitted to trading
on AIM ("Admission") and it is expected that Admission will become effective
at 8.00 a.m. on 15(th) December 2023.

After Admission, the total number of Ordinary Shares in issue will be
47,272,811 and the total number of voting rights will therefore be 47,272,811.
Following Admission, this figure may be used by shareholders 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 in, the
share capital of the Company under the Financial Conduct Authority's
Disclosure Guidance and Transparency Rules.

Founder & CEO of Elixirr, Stephen Newton said:

"I am always exceptionally proud to expand our team, and finding the right
people to bring into the group is no small task. Our M&A team works
tirelessly to find companies that not only broaden what we're able to offer
clients but improve the work we're already doing with them. We also look for
those who share in Elixirr's ethos, entrepreneurial spirit and desire to
create meaningful change - and in Insigniam we have found exactly that. I look
forward to seeing the impact of their team's unique approach to consulting -
which looks deeply into the areas many consultancies often overlook or don't
have true capability to impact. They are the undisputed market leaders in
transformation and organisational change, and this is something that will be
extremely valuable to both our current and future clients. By combining our
services and expertise, from strategy through to execution, we are very
well-positioned to provide full end-to-end services to our collective clients
in a more impactful, dynamic way."

Co-Founder of Insigniam, Shideh Sedgh Bina said:

 

"We are thrilled that Elixirr not only expands our ability to provide an
enhanced range of services for our clients, but also enables us to partner
with C-suite executives to design and execute on their
fit-for-21st-century-agenda. The Elixirr disrupter mindset, entrepreneurial
culture and leadership team are perfectly aligned with our commitment to serve
our clients to deliver remarkable results. Like Insigniam, Elixirr is not
afraid to challenge convention, talk straight and disrupt the status quo.
Elixirr and Insigniam both hold dear an ethos of deep client service, and we
believe that together, combining the best of 'being human' with technology and
data, we will deliver dramatic new outcomes for our clients."

Co-Founder of Insigniam, Nathan Owen Rosenberg said:

"Insigniam's combination with Elixirr gives our clients a range of services
that, in my scan of the market, has not been available. Already, the Elixirr
partners and Insigniam partners are collaborating to catalyse new value for
our combined clients, as well as working on a new set of offerings. Literally,
we can now offer the full range of expertise and services needed to transform
a CEO's agenda into reality. Clients will see new capabilities to fulfill
their intentions. We now provide extraordinary value to the CEO and his or her
team and to each executive in the C-suite, beyond what either firm could offer
before the combination."

The person responsible for arranging the release of this announcement on
behalf of the Company is Nicholas Willott, Finance Director and Company
Secretary of the Company.

 

For further information please contact:

 Elixirr International plc

 Stephen Newton, CEO

 Graham Busby, CFO

 Public and Investor Relations contacts:

 investor-relations@elixirr.com

 Cavendish Capital Markets Ltd (Nominated Adviser & Joint Broker)       +44 (0) 20 7220 0500

 Stephen Keys, Charlie Beeson (Corporate Finance),

 Sunila De Silva (ECM)

 Investec Bank plc (Joint Broker)                                       +44 (0) 20 7597 4000

 Carlton Nelson, Henry Reast (Corporate Broking)

About Elixirr International plc

Elixirr is an established global award-winning management consultancy,
challenging the larger consultancies by delivering innovative and bespoke
solutions to a repeat, globally-recognised client base.

Elixirr was founded in 2009, by Stephen Newton, Graham Busby, Ian
Ferguson, Andy Curtis and Mark Goodyear, experienced business advisors who
identified a market opportunity to provide bespoke, personal services as a
'challenger' to the traditional consultancy businesses in the
market. Elixirr guides its clients to overcome challenges such as:
future-proofing against technological disruption; development and roll-out of
innovative new propositions, products and services; incubating new businesses;
navigating a more complex and multinational regulatory environment; and
project management and implementation of major change programmes.

 

General

This announcement is for information purposes only and does not constitute or
form part of any offer to issue or sell, or the solicitation of an offer to
acquire, purchase or subscribe for, any securities in any jurisdiction and
should not be relied upon in connection with any decision to subscribe for or
acquire ordinary shares in the capital of the Company.  In particular, this
announcement does not constitute or form part of any offer to issue or sell,
or the solicitation of an offer to acquire, purchase or subscribe for, any
securities in the United States.

This announcement has been issued by, and is the sole responsibility of, the
Company.  No person has been authorised to give any information or to make
any representations other than those contained in this announcement and, if
given or made, such information or representations must not be relied on as
having been authorised by the Company.

No statement in this announcement is intended to be a profit forecast or
profit estimate and no statement in this announcement should be interpreted to
mean that earnings per share of the Company for the current or future
financial years would necessarily match or exceed the historical published
earnings per share of the Company.

This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "projects", "anticipates", "expects",
"intends", "may", "will", "would" or "should" or, in each case, their negative
or other variations or comparable terminology. These forward-looking
statements include matters that are not historical facts. They appear in a
number of places throughout this announcement and include statements regarding
the directors of the current Company's intentions, beliefs or expectations
concerning, among other things, the Company's results of operations, financial
condition, liquidity, prospects, growth, strategies, and the Company's
markets. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances. Actual
results and developments could differ materially from those expressed or
implied by the forward-looking statements. Forward-looking statements may and
often do differ materially from actual results. Any forward-looking statements
in this announcement are based on certain factors and assumptions, including
the directors of the Company's current view with respect to future events and
are subject to risks relating to future events and other risks, uncertainties
and assumptions relating to the Company's operations, results of operations,
growth strategy and liquidity. Whilst the directors of the Company consider
these assumptions to be reasonable based upon information currently available,
they may prove to be incorrect. Save as required by applicable law, the AIM
Rules or the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority, the Company undertakes no obligation to release publicly
the results of any revisions to any forward-looking statements in this
announcement that may occur due to any change in the directors of the
Company's expectations or to reflect events or circumstances after the date of
this announcement.

Neither the content of the Company's website nor any website accessible by
hyperlinks to the Company's website is incorporated in, or forms part of, this
announcement.

Certain figures contained in this announcement, including financial
information, have been subject to rounding adjustments. Accordingly, in
certain instances, the sum or percentage change of the numbers contained in
this announcement may not conform exactly with the total figure given.

All references to time in this announcement are to London time, unless
otherwise stated.

 

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