Gresham to acquire Electra Information Systems for $38.6 million
LONDON, UK: Gresham Technologies plc (LON: GHT) wholly-owned subsidiary Gresham Enterprise Storage Inc., has entered into a conditional agreement to purchase the entirety of the issued and outstanding shares of common stock of Electra Information Systems for a total cash consideration of up to US$38.6 million including up to US$9.65 million in deferred consideration.
Electra Information Systems, established over 20 years ago, is a leading provider of innovative solutions and services developed to improve efficiency and mitigate risk in post-trade processing, predominantly within the US financial services industry.
Electra has high levels of recurring revenue, representing approximately 97% of its total revenue in the financial year to 31 December 2020. In FY2020, Electra generated revenues, adjusted EBITDA and adjusted cash EBITDA of £10.1m, £2.4m and £0.9m respectively, representing a CAGR% between 2018 and 2020 of 4%, 19% and 50% respectively.
The initial consideration is proposed to be funded using Gresham’s existing cash resources and out of the net proceeds of a proposed placing of up to 12.5 million new ordinary shares of 5 pence each in the capital of the company and an offer to be made on behalf of the company by PrimaryBid Limited on its online PrimaryBid platform for up to 625,000 new ordinary shares.
The Total Consideration will be satisfied through the payment on the closing of the Acquisition of the Initial Consideration of US$28.95 million (£20.4 million) and up to US$9.65 million (£6.8 million) in deferred consideration, payable in two equal instalments, subject to the achievement of performance criteria referable to the recurring revenues of Electra, after the first and second anniversaries of Completion.
The Company proposes to fund the Initial Consideration and its associated costs through its existing cash resources, a proposed placing of the Placing Shares to institutional investors and the Directors and an offer of the Retail Offer Shares to be made on behalf of the Company on the online PrimaryBid.com platform.
The Placing will be conducted through the Bookbuild which will be launched immediately following this announcement. A separate announcement regarding the Retail Offer and its terms will be made shortly.
The Company intends to raise up to £21.0 million, before expenses, through the Placing and the Retail Offer. The total number of New Ordinary Shares to be issued under the Placing and the Retail Offer will not exceed 13,125,000 New Ordinary Shares, representing approximately 18.7% of the Company’s existing issued share capital.
Gresham Technologies plc is a leading software and services company that specialises in providing real-time solutions for data integrity and control, banking integration, payments and cash management. Listed on the main market of the London Stock Exchange (GHT.L) and headquartered in the City of London, its customers include some of the world’s largest financial institutions and corporates, all of whom are served locally from offices located in the UK, Europe, North America and Asia Pacific.
Gresham’s award-winning Clareti software platform is a highly flexible and scalable platform, available on-site or in the cloud, designed to address today’s most challenging financial control, risk management, data governance and regulatory compliance problems.
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27 May, 4:35 pm GMT+1 · Disclaimer
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