Northcoders Group agrees to acquire Tech Returners for a total of £1.576 million

LONDON, UK: Northcoders Group (AIM:CODE), an independent provider of training programmes for software coding, has entered into a conditional agreement to acquire Tech Returners Limited for a total consideration of £1.576 million, to be satisfied in cash and shares. 

This strategic acquisition will further diversify Northcoders’ Business Services division, adding a new income stream to the Group’s growing corporate-focused business model.

Founded in 2016, Tech Returners specialises in remote training and placing of senior level professionals looking to re-enter the workplace in the technology sector. 

The business uses its industry leading knowledge and techniques to up-skill corporate sponsored individuals or existing corporate teams for large corporate clients across a number of industries. 

Corporate clients have included global brands such as AutoTrader, BBC, booking.com, checkout.com, The Guardian, Holiday Extras, Lloyds, On the Beach and the Telegraph.  Tech Returners is expected to be fully integrated into the Group by Q2-2023 and will continue to operate under its existing brand.

Pursuant to the terms of the Acquisition, the company has agreed to acquire the entire equity interest in Tech Returners from Rebecca Ferguson (néeTaylor) and James Heggs (‘the Tech Returners Founders’), for a total consideration of £1.576 million, to be satisfied in cash and shares. 

The initial consideration of £1.326 million will be satisfied on completion by payment of £0.326 million (‘Cash Consideration’) and the issue of 322,580 new ordinary shares of £0.01 each in the capital of the Company (‘Consideration Shares’). 

Deferred consideration of £0.25 million is payable twelve months post Completion in cash (‘Deferred Consideration’). 

Completion of the Acquisition is conditional on admission to trading of the Consideration Shares (‘Admission’) which is expected to take place on 8 February 2023.  The Cash Consideration and Deferred Consideration will be financed through the Group’s existing cash and debt resources.  The Consideration Shares will be issued on a non-pre-emptive basis utilising the Company’s existing shareholder authorities. 

In addition, the Acquisition Agreement contains lock-in provisions pursuant to which the Tech Returners Founders have agreed that subject to certain customary exceptions for a period of twelve months from the date of completion, they shall not transfer or dispose of the Consideration Shares without the prior permission of the Company and for a further period of twelve months, the Tech Returners Founders shall only sell, transfer or dispose of the Consideration Shares through or with the agreement of WH Ireland.

The Tech Returners Founders will join the Northcoders senior leadership team on completion of the Acquisition and their commitment to staying with the enlarged group is supported by their willingness to accept the Consideration Shares. 

Rebecca has years of experience as a human resources leader within the technology sector and James has many years of experience as a chief technology officer, much of this within the consultancy area, and both will be a tremendous asset to the Group’s Business Services division.

In 2019 Rebecca Ferguson founded Reframe Women in Tech, the largest women in technology conference in the North of England and she will continue to run and grow Reframe Women in Tech as part of the Northcoders Group.

Following the Acquisition, Northcoders will not only benefit from entry into a new service area, specialising in senior level re-training, but the team of 16 Tech Returners will significantly support the Group in building a significant presence in key locations such as London.  There is a solid shared cultural focus on diversity in the technology sector, with over 60% of returners being women and a strong track record of training ex-Services personnel, refugees and supporting international disposition.

In its last reported results for the year ended 30 November 2021 Tech Returners reported a profit before tax of £68k on revenues of £565k and had net assets of approximately £7k.  For the equivalent period to 30 November 2022 management accounts indicated revenues of over £800k and a breakeven position.  Tech Returners is expected to grow further in 2023 supported by a strong order book of over £300k and an encouraging levels of new opportunities.

Under Northcoder’s ownership, Tech Returners is expected to make a positive contribution to the Group’s performance for the year ending 31 December 2023.