Ideagen acquires Workrite in £6.8m deal

Information management software company Ideagen announced the acquisition of the entire issued share capital of Workrite for a net cash consideration of up to £6.8m on Friday.

The AIM-traded firm described Workrite as a “fast growing” software-as-a-service (SaaS) business, that has developed a SaaS based electronic learning platform for the occupational health and safety market

It said Workrite, based in West Sussex, has around 500 customers including the London Stock Exchange, Panasonic, King's College London, The Law Society and Credit Suisse

On a current run rate, Workrite was generating around £1.7m in revenues, of which £1.6m was recurring.

The acquisition was expected to be earnings neutral in the current financial year, and in the first full year of ownership, would contribute £0.7m additional EBITDA.

Ideagen said Workrite would become a “key component” of the Ideagen cloud proposition, providing a content rich, scalable e-learning solution, supporting its strategy as a consolidator within the global quality, health, safety and environmental (QHSE) market.

The initial cash consideration of £6.0m was paid on completion, and a further payment of £0.8m would be made out of escrow on the first anniversary of the acquisition, if certain business objectives were achieved.

Ideagen said the consideration would be funded from its cash reserves, and existing debt facility.

The board said it was “pleased” with the strong level of cash collections in the second half of the financial year, which was running in line with expectations.

It said it has extended the size of its debt facility from £28m to £40m, to fund further acquisitions.

“We are delighted to announce our third acquisition of the year,” said executive chairman David Hornsby.

“Workrite is highly complementary to Ideagen and in line with our strategy of acquiring businesses that have strong intellectual property and recurring revenues.

“QHSE is a valuable yet fragmented market and the acquisition will further enhance our market position providing a leading e-learning solution for new and existing customers.”

At 1109 GMT, shares in Ideagen were down 4.37% at 175p.