LONDON: The Board of Eleco plc (AIM: ELCO), the specialist software provider for the built environment, has sold its wholly owned subsidiary Veeuze GmbH, a German-based visualisation business, to 3A Consult UG via a management buy-out.
The Board believe that the Disposal reinforces the Group’s strategic focus on its core and higher growth Building Lifecycle businesses and primary customer verticals, and reflects a continued emphasis on shareholder value.
Under the terms of the agreement, the consideration for the Disposal is an initial nominal cash amount of €1, payable on completion and a share of the annual profit after tax over a 5-year period to 2030, capped at €250,000 payable in cash. The separation of the business is deemed to have occurred on 1 January 2026. Any material cash proceeds from the profit share will be used to support the Company’s existing growth strategy.
Following a period of challenging market conditions, Veeuze became increasingly non-core to the Group and required a level of ongoing investment that was not aligned with Eleco’s strategic priorities. During the financial year ended 31 December 2025, the Subsidiary experienced a decline in performance, evidenced by lower revenues, continued operating losses, and, in the second half of 2025, the requirement for substantial cash injections to sustain operations.
In the financial year ended 31 December 2025, based on management accounts, the Subsidiary had revenues of c£3.7m and recorded a loss before tax of c£1.3m. The Subsidiary has net liabilities of approximately £1.1m. The Disposal will prevent ongoing losses and cash outflows associated with Veeuze.
The Disposal has been structured to support the continuity and future development of Veeuze under the Management ownership. In connection with the Disposal, Eleco has agreed to provide a financing package of €1.5m (c£1.3m) to Veeuze (the “Financing Package”).
The Board has approved the commercial terms of the Financing Package on an arm’s length basis. This will be repayable over a five‑year period to 31 December 2030, and will carry an interest rate of ECB base rate plus 5.85% per annum (at a minimum of 8% per annum or above).
The purchaser of the Subsidiary is a former-director of Veeuze and the controlling shareholder of 3A Consult UG. Consequently, the Disposal of Veeuze and provision of the Financing Package are both related party transactions pursuant to Rule 13 of the AIM Rules (the “Related Party Transactions”).
The independent Directors, (being all directors of Eleco) consider, having consulted with the Company’s nominated adviser, Cavendish Capital Markets Limited, that the terms of the Related Party Transactions are fair, reasonable and on an arm’s length basis insofar as the Company’s shareholders are concerned.
Jonathan Hunter, Chief Executive Officer of Eleco plc, said: “As previously reported, the operating and technological environment for our visualisation business, Veeuze, has been challenging in the last 24 months. This reflects, among other factors, macroeconomic conditions in its core DACH interior products market, tighter customer budgets and demand patterns more closely linked to end-consumer confidence.
“This transaction reinforces our strategic focus on accelerating growth in our core businesses. It releases valuable management capacity to support execution and future M&A activity. The disposal is expected to be accretive to the Group’s organic growth profile, profitability metrics and cash generation, enhancing Eleco’s long‑term growth potential.”
“We are delighted that the Management has chosen to take the business forward into its next chapter. This transaction provides greater certainty for the Veeuze business, its employees and its customers, and we wish them every success under the new ownership structure.”