Acquisition and Trading Update
20/12/2021 06:59
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RNS Number : 1142W Sopheon PLC 20 December 2021
SOPHEON PLC
("Sopheon," the "Company" or the "Group")
Acquisition and Trading Update
Initiation of M&A strategy coupled with solid execution of revenue
objectives for the year
Sopheon, the international provider of software and services for Enterprise
Innovation Management solutions, is pleased to announce the acquisition of the
business and assets of ROI Blueprints LLC ("ROIB"), a cloud-based solution
focused on detailed enterprise planning and execution. The Group is also
providing a trading update for the current year ending 31 December 2021.
ROI Blueprints
ROIB is a cloud-based project and portfolio SaaS solution designed to help
organizations drive operational execution management of corporate initiatives.
Integrating the ROIB solution with Sopheon's Accolade product will extend
the value of Sopheon's offering and expand market reach. It will also further
accelerate Sopheon's migration towards cloud and SaaS. In addition to the
cross-selling opportunities, these attributes will further underpin the
Group's solid retention metrics. ROIB was founded in 2014 by industry domain
experts Ketan Jahagirdar and Russ Fuja following years of expertise working
with enterprise leaders such as Motorola, Accenture, and Diamond Management
Consultants.
Greg Coticchia, CEO of Sopheon commented: "We are excited to add ROIB to the
Sopheon family, further enhancing our ability to link and connect corporate
innovation planning and operational execution for improved risk mitigation and
decision making. ROIB not only brings new capability to our offering but also
represents a wealth of knowledge which will contribute to our future roadmap.
We see this as a technology acquisition that will improve our time to market
for a key product capability. I believe it would have taken us at least two
years of material investment to develop equivalent capability in house."
The transaction is structured as an asset purchase. Initial consideration of
US$1.5m is payable in cash, funded from the Group's existing resources of over
$24m at 30 November 2021. An additional, contingent deferred earn-out of up to
$1.5m is payable over the next three years, linked to product deliverable and
revenue targets. Up to one-third of the earn-out is payable in Sopheon shares
valued at £9.35 per share, the mid-market closing price on 16 December 2021.
The business is expected to record pro-forma revenues of approximately $0.1m
in 2021. Sopheon will also take on an annual cost base of approximately $0.5m
and net financial assets of approximately nil, before valuation of intangibles
and goodwill. As noted above, Sopheon revenues are expected to respond
positively to the added market reach afforded by the ROIB capability, which
adds upsell opportunity and the potential for a higher acquisition of new
customers.
Ketan Jahagirdar, ROIB co-founder and CEO commented: "Sopheon represents a
unique market fit for us. We have built what we believe is the most compelling
platform for project and portfolio execution. We are very excited that we can
now accelerate further development and commercialization as part of the
overall Sopheon product offering, leveraging Sopheon's proven sales and
marketing resources."
Trading update
In our half-year report issued on 25 August 2021, we reported rising
commercial traction across our core performance metrics as we migrated the
business to a more recurring model. We are pleased to report that we expect
revenues and EBITDA for the year ended 31 December 2021 to be comfortably in
line with market expectations, coupled with solid progress on building annual
recurring revenue. The closing weeks of the year remain busy with commercial
activity. The Board will update shareholders further on the full year outturn
at the end of January.
Andy Michuda, chairman of Sopheon, commented: "I am delighted to be embarking
on the M&A strategy that we have previously signposted, with the
acquisition of ROI Blueprints. It adds depth to our product offering, and
brings important intellectual property and capability to support our cloud
transition. Coupled with our strong organic execution, this is a great way to
finish the year".
For further information contact:
Andy Michuda (Executive Chairman) Sopheon plc + 44 (0) 1276 919 560
Arif Karimjee (CFO)
Carl Holmes/Edward Whiley (Corporate Finance) finnCap Ltd + 44 (0) 20 7220 0500
Alice Lane/Sunila da Silva (ECM)
This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (596/2014/EU) as it forms part of UK domestic law
by virtue of the European Union (withdrawal) act 2018 ("MAR").
About Sopheon. Sopheon (LSE: SPE) partners with customers to provide complete
Enterprise Innovation Management
(https://www.sopheon.com/?utm_source=PressRelease&utm_medium=Press&utm_campaign=PR-Gen)
solutions, including software, expertise, and best practices, that enable
them to achieve exceptional long-term revenue growth and profitability.
Sopheon's Accolade solution provides unique, fully-integrated coverage for the
entire innovation management and new product development lifecycle, including
strategic innovation planning, roadmapping, idea and concept development,
process and project management, portfolio management, and resource planning.
Sopheon's solutions have been implemented by over 250 customers with over
60,000 users in over 50 countries. Sopheon is listed on AIM, operated by the
London Stock Exchange. For more information, please visit www.sopheon.com
(http://www.sopheon.com) .
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