Prior to publication, the
information contained within this announcement was deemed by the
Company to constitute inside information as stipulated under the UK
Market Abuse Regulation. With the publication of this announcement,
this information is now considered to be in the public
domain.
26 July
2024
Software Circle plc
("Software Circle", the "Company" or the
"Group")
Acquisition of Link Maker Systems
Limited ("Link Maker")
Software Circle plc (AIM: SFT) is pleased to
announce that it has acquired the entire issued share capital of
Link Maker Systems Limited. Link Maker's adoption platform joins-up
children's social care across the UK to increase placement choice
for children, and to improve use of data and collaboration between
local authorities and adoption agencies.
The total consideration of £4.5m will be
satisfied in cash and is structured on a debt free/cash free basis.
The acquisition is expected to be cash flow generative and earnings
enhancing in the first year after acquisition.
The initial consideration paid at completion was
£3.0m. Up to a further £1.5m is payable contingent upon the
achievement of certain targets relating to the future financial
performance of Link Maker (the "Contingent Consideration"). Further
information on the terms of the acquisition is set out
below.
About Link
Maker
Link Maker's platform increases placement choice
for children awaiting adoption, creating a UK-wide pool of
available adopters, and improving the use of data and collaboration
between all adoption agencies nationwide, covering England,
Scotland, and Wales.
The business has been in operation for over a
decade and provides mission critical services for adoption agencies
and local authorities. Over 95% of revenues arise from annual
recurring fees from its clients.
The three shareholders, Craig Rigby-Wilson
(Co-CEO), Andy Leary-May (Co-CEO) and Linda Hill (Operations
Director) have entered into new employment contracts and will
continue to lead the team of six staff.
The unaudited financial statements for Link
Maker for the year ended 31 March 2024 reported revenue of £1.56m,
EBIT of £0.89m and closing net assets of £0.46m. After adjustments
our valuation is based upon a lower expected EBIT of approximately
£0.7m.
Terms of the
Acquisition
The £3.0m initial consideration was funded from
existing Software Circle cash reserves.
The Contingent Consideration is dependent on
Link Maker achieving certain annual recurring revenue targets and
may be achieved in full or in part by exceeding those targets in
the year commencing July 2025.
Gavin
Cockerill, CEO said: "What Link Maker do really
matters and we are extremely proud to have the team join us as the
second business in our Health and Social Care segment. Together, we
believe we can make children's social care more efficient, more
secure and more child focussed. We're looking forward to helping
Andy, Craig, Linda and the team achieve the future aims of the
business."
Craig
Rigby-Wilson commented: "As Andy looks to take
more of a step back from the business, it was important for us to
find a new owner that understood the social aims of the business.
Supporting us in the development and rollout of new modules like
Letter Swap, created to facilitate post-adoption contact between
adopters and birth families. We're excited to see what Software
Circle and Link Maker can achieve together."
Outlook
Having added Arc Technology Limited ("Arc") in
February 2024, the first within our Ed Tech segment, Be The Brand
Experience Limited ("Bethebrand") which completed in May 2024, and
now Link Maker, we're now well on the way to deploying the capital
we raised in September 2023.
We intend to deploy the remaining capital.
Focussing on quality, irrespective of pace. Our strategy remains
focused on identifying and acquiring businesses that align with our
criteria. Further strengthening our portfolio and driving
sustainable growth. We are committed to maintaining our disciplined
approach to acquisitions, ensuring that each addition is aligned
with our culture, enhances our overall value proposition, supports
our long-term objectives and maximises Operating Cash Flow Per
Share.
For further
information:
Software Circle
plc
Gavin Cockerill
(CEO)
07968 510 662
Allenby Capital
Limited (Nominated Adviser and
broker)
0203 328 5656
David Hart / Piers Shimwell (Corporate
Finance)
Stefano Aquilino / Joscelin Pinnington (Sales
and Corporate Broking)
Notes to editors:
Software Circle plc is a UK based acquirer of
vertical market software businesses. Our aim is to help founders
find the right exit strategy, without fuss or drama. Continuing
operations in an independent, decentralised way. Keeping the
entrepreneurial spirit and culture that exists in the businesses we
acquire. Providing a permanent home for their teams, management
talent and culture. For more information visit www.softwarecircle.com.