LONDON, UK: Eleco Plc (AIM: ELCO), a specialist software provider for the built environment, has announced that it has bought BestOutcome Limited, a UK-based SaaS business that offers project portfolio management (PPM) software, for an initial cash consideration of £4.825m (an adjusted initial value of £3.525m on a cash-and-debt-free equivalent).

The deal will be funded by Eleco’s internal cash resources.

BestOutcome’s main products, PM3 and PM3 Time, are used to manage strategic programmes and multiple portfolio projects. The company has over 60 active customers across the UK, mainly in the public sector, including the NHS, universities and county councils.

The acquisition will strengthen Eleco’s Building Lifecyle portfolio and enhance its recurring revenue and earnings. Eleco expects the deal to be earnings accretive in the second half of the year ending 31 December 2023 and beyond.

The transaction also includes a potential deferred consideration of £0.5m subject to BestOutcome meeting specific performance targets in 2023 and 2024. This makes the total potential consideration to be £5.325m (an adjusted total potential consideration of £4.025m on a cash-and-debt-free equivalent).

BestOutcome reported (SaaS-related) revenues of £2.0m and profit before tax of £0.2m for the year to 31 December 2022, before alignment with Eleco Group Generally Accepted Accounting Principles. Its unaudited management accounts for the first five months of 2023 show revenue of approximately £0.9m and profit before tax of circa £0.2m, before alignment with Eleco Group Generally Accepted Accounting Principles. The company had cash of £1.3m as at end of May.

BestOutcome will continue to operate under its own brand, known as ‘BestOutcome, an Elecosoft company’.

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