Idox agrees sale of its grants consultancy business

Information management software and services company ldox has agreed the disposal of its Netherlands-based grants consultancy and database business, it announced on Friday, to an affiliate of technology-focussed private equity firm SilverTree Equity Partners.

The deal was expected to complete by 6 April, with total consideration of up to €8.14m comprising initial cash of €4.25m, payable on completion, as well as earn-out of up to €1m of cash payable on performance in the 2021 financial year.

A 6% non-amortising loan note of €1.39m and a further earn-out of up to €1.5m of cash made up the rest of the consideration, both contingent on return thresholds being met, and payable on any subsequent acquisition of the business.

The AIM-traded firm said the grants consultancy business was one of the Netherlands’ leading providers of innovation funding consultancy and data, and employed 67 people.

It said the business reported revenues of £5.5m, an adjusted EBITDA contribution of £1.1m and profit before tax of £0.2m in the financial year ended 31 October.

Gross assets at year-end totalled £8.7m, with the disposal expected to generate a profit on sale of £0.9m in Idox’s current financial year.

The board said that, following the recent sale of Idox Compliance, the sale of the grants consultancy business marked the disposal of the remaining business within Idox's content division, with the group now exclusively focused on its core software activities.

It said the proceeds of the grants consultancy sale, together with the proceeds of the disposal of Idox Compliance, would be used to reduce the company’s net debt, which stood at £16.1m as at 31 October, and to continue to invest in its organic and inorganic growth strategy.

“This transaction signifies a continuation of our strategy as we continue to work on the organisational simplification aspect of our four pillars framework, whilst reducing net debt and investing in growth,” said chief executive officer David Meaden.

“The disposal of the grants consultancy business, and wider Idox content division, reflects our ongoing commitment to create value as a public sector focused organisation.

“Whilst we have been pleased with Idox content's performance, we believe the disposal is a good opportunity for the team to continue their success with more relevant owners in order to realise its own ambitions.”

At 1620 GMT, shares in Idox were down 13.65% at 62p.