Beeks Financial Cloud acquires trade analytics software company Velocimetrics
The total consideration includes an initial cash consideration of £0.75 million, an equity payment of £0.30 million, and a further £0.25 million of cash consideration held as retention.
Cloud computing and connectivity provider for financial markets Beeks Financial Cloud Group PLC (LON:BKS) today announces the acquisition of the entire issued share capital of Velocimetrics Limited, a UK-based network monitoring and trade analytics software company, for a base consideration of £1.3 million in cash and equity, plus contingent earn-out.
The acquisition is unconditional and is effective as of April 14, 2020. The consideration comprises an initial cash consideration of £0.75 million which has been paid, an equity payment of £0.30 million to be satisfied by the issue of 363,458 ordinary shares of 0.125 pence par value each, and a further £0.25 million of cash consideration held as retention and payable within four months of completion, subject to no warranty claims having been made.
Earn out consideration may be payable by Beeks depending on the Group achieving certain challenging gross revenue targets during the financial years ending 30 June 2020 and 31 June 2021.
Application has been made to the London Stock Exchange for the 363,458 Initial Consideration Shares to be admitted to trading on AIM. It is expected that admission will become effective and that dealings in the Initial Consideration Shares will commence on or around April 16, 2020.
Beeks has concurrently entered into a new debt facility with The Royal Bank of Scotland plc totalling £1.5 million to fund the acquisition and provide additional growth capital for the enlarged Group.
Regarding the deal rationale, Beeks explains that Velocimetrics operates in a specialist field with few direct competitors. The acquisition is set to enable Beeks to offer value-add services in network monitoring and trade analytics software to its customer base, increasing the functionality within the Beeks Portal and providing another point of differentiation from generic cloud hosting and infrastructure providers. The organic development of these capabilities had been on management’s mid-term product roadmap but would have taken appreciable time and expense.
Velocimetrics reported a loss before tax of £(0.47m) in the year to June 30, 2019. The Directors believe certain cost-reductions and operational synergies can be achieved.
Immediately following the acquisition, Beeks will commence integration of the Velocimetric employees and also commence development work on a SaaS version of the Velocimetrics products, expanding the total addressable market for these offerings and making them more attractive to the existing Beeks’ customer base.