Marlowe buys Elogbooks after bumper year for earnings

Safety and regulatory compliance specialist Marlowe has conditionally agreed to acquire Elogbooks Facilities Management and Elogbooks Facilities Services for initial consideration of £7.35m, it announced on Friday, on a cash-free, debt-free basis.

The AIM-traded firm described Elogbooks as a “leading provider” of contractor management software and services, with the acquisition carrying an enterprise value of up to £14.05m.

It said the acquisition represented “the next step” in Marlowe's strategy to deliver integrated technology and services, to enhance the compliance, safety and upkeep of its clients' premises.

Marlowe also announced a placing, by way of an accelerated bookbuild, which was expected to raise at least £35m, and would fund the acquisition as well as provide resources to accelerate the group's acquisition-led strategy amid what the board called a “favourable” mergers and acquisitions climate.

Looking at its unaudited results for the year ended 31 March, which Marlowe also released on Friday, the company reported a 51% improvement in adjusted EBITDA to £16.6m, and a 52% rise in adjusted profit before tax to £13.6m.

Adjusted earnings per share were ahead 30% at 24.3p, with organic revenue growth accelerating to 7% from 4.5% year-on-year.

The company made eight acquisitions during the 2020 financial year.

“The acquisition of Elogbooks is the next step in our strategy to deliver integrated technology and services to enhance the compliance, safety and upkeep of our clients' premises,” said chief executive officer Alex Dacre.

“Alongside Meridian, our existing software platform, the addition of Elogbooks will position us to offer our clients a complete technology-enabled contractor management, compliance and health & safety solution.

“The acquisition significantly expands the group's digital capabilities and service offering in providing our clients with visibility and control over their service providers' performance and compliance.”

Dacre said the company saw “considerable scope” to deploy Elogbooks' system and technology across its existing businesses, to further enhance the health, safety and compliance of its customers, and was “looking forward” to the “attractive returns” that the acquisition would generate.

“In addition, we are pleased to report another strong financial performance in the 2020 financial year, and a year of substantial progress in developing the scale and breadth of our group through accelerating organic growth, significant mergers and acquisitions, further margin enhancement and good underlying cash generation.

“Marlowe has further strengthened its position as the UK leader in specialist services which assure safety and regulatory compliance.”

At 1128 BST, shares in Marlowe were up 0.21% at 479p.