Acquisition of Watermark Technologies Limited
07/12/2022 17:07
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RNS Number : 9695I Grafenia plc 07 December 2022
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7 December 2022
Grafenia plc
("Grafenia", the "Company" or the "Group")
Acquisition of Watermark Technologies Limited ("Watermark")
Grafenia plc (AIM: GRA) is pleased to announce that it has acquired the entire
issued share capital of Watermark Technologies Limited, a provider of document
management software and systems, based in Shipley, West Yorkshire on a debt
free/cash free basis.
The total consideration of up to £2.5m will be satisfied in cash. The
acquisition is expected to be cash flow generative and earnings enhancing in
the first year after acquisition.
The initial consideration comprises cash of £1.5m to be paid on completion,
together with deferred consideration of £1.0m to be paid on the first
anniversary of completion.
About Watermark Technologies Limited
Watermark's range of document management software solutions include
'Papercloud' (a cloud hosted solution), 'Volume' (a client hosted solution)
and 'VolumeRemote' (a remotely hosted solution). The products are licensed to
hundreds of predominantly SME businesses in the financial, healthcare and
insurance sectors. Approximately 90% of Watermark's revenues arise from annual
recurring software fees.
The business was founded in 2003 by Tim Boggie and Stewart Spink, both of whom
will remain on a part time consultancy basis for six months. Watermark
currently has 11 employees. James Hughes, a Corporate Development Associate
within our Software Circle team, has been appointed Managing Director of
Watermark.
The unaudited financial statements for Watermark for the year ended 31 March
2022 reported revenue of £1.21m, EBIT of £0.44m and closing net assets of
£0.46m.
Acquisition Rationale
Watermark meets Grafenia's acquisition criteria of providing vertical market
software with revenues of a recurring nature. We believe it can be sold to
SMEs operating in vertical markets beyond the financial, healthcare and
insurance sectors.
Gavin Cockerill, Acting CEO of Grafenia said: "The acquisition of Watermark is
yet another step toward growing our software nucleus. Maximising what Grafenia
is good at, selling and supporting software systems that help businesses run
better."
Tim Boggie / Stewart Spink, joint founders of Watermark, made the following
joint statement: "We had been planning for retirement and actively seeking a
new owner for the business we have built and cherished over 20 years. We
believe Grafenia is the perfect home to provide continuity of support and
maintain long term customer relationships developed over many years. We look
forward to seeing Watermark thrive in a larger group."
For further information:
Grafenia plc
Gavin Cockerill (Acting CEO)
07968 510 662
Allenby Capital Limited (Nominated Adviser and broker)
0203 328 5656
David Hart / Piers Shimwell
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