Grafenia plc Acquisition of Watermark Technologies Limited (9695I)
08 December 2022 - 4:07AM
UK Regulatory
TIDMGRA
RNS Number : 9695I
Grafenia plc
07 December 2022
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
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7 December 2022
Grafenia plc
("Grafenia", the "Company" or the "Group")
Acquisition of Watermark Technologies Limited ("Watermark")
Grafenia plc (AIM: GRA) is pleased to announce that it has
acquired the entire issued share capital of Watermark Technologies
Limited, a provider of document management software and systems,
based in Shipley, West Yorkshire on a debt free/cash free
basis.
The total consideration of up to GBP2.5m will be satisfied in
cash. The acquisition is expected to be cash flow generative and
earnings enhancing in the first year after acquisition.
The initial consideration comprises cash of GBP1.5m to be paid
on completion, together with deferred consideration of GBP1.0m to
be paid on the first anniversary of completion.
About Watermark Technologies Limited
Watermark's range of document management software solutions
include 'Papercloud' (a cloud hosted solution), 'Volume' (a client
hosted solution) and 'VolumeRemote' (a remotely hosted solution).
The products are licensed to hundreds of predominantly SME
businesses in the financial, healthcare and insurance sectors.
Approximately 90% of Watermark's revenues arise from annual
recurring software fees.
The business was founded in 2003 by Tim Boggie and Stewart
Spink, both of whom will remain on a part time consultancy basis
for six months. Watermark currently has 11 employees. James Hughes,
a Corporate Development Associate within our Software Circle team,
has been appointed Managing Director of Watermark.
The unaudited financial statements for Watermark for the year
ended 31 March 2022 reported revenue of GBP1.21m, EBIT of GBP0.44m
and closing net assets of GBP0.46m.
Acquisition Rationale
Watermark meets Grafenia's acquisition criteria of providing
vertical market software with revenues of a recurring nature. We
believe it can be sold to SMEs operating in vertical markets beyond
the financial, healthcare and insurance sectors.
Gavin Cockerill , Acting CEO of Grafenia said: "The acquisition
of Watermark is yet another step toward growing our software
nucleus. Maximising what Grafenia is good at, selling and
supporting software systems that help businesses run better."
Tim Boggie / Stewart Spink , joint founders of Watermark, made
the following joint statement: "We had been planning for retirement
and actively seeking a new owner for the business we have built and
cherished over 20 years. We believe Grafenia is the perfect home to
provide continuity of support and maintain long term customer
relationships developed over many years. We look forward to seeing
Watermark thrive in a larger group."
For further information:
Grafenia plc
Gavin Cockerill (Acting CEO) 07968 510 662
Allenby Capital Limited (Nominated Adviser and broker) 0203 328 5656
David Hart / Piers Shimwell
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END
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