Grafenia plc Acquisition of Topfloor Systems Limited (3299Q)
17 February 2023 - 11:35PM
UK Regulatory
TIDMGRA
RNS Number : 3299Q
Grafenia plc
17 February 2023
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
considered to be in the public domain.
17 February 2023
Grafenia plc
("Grafenia", the "Company" or the "Group")
Acquisition of Topfloor Systems Limited ("Topfloor")
Grafenia plc (AIM: GRA) is pleased to announce that it has
acquired the entire issued share capital of Topfloor Systems
Limited, a provider of property management software services, based
in Dublin, Ireland, on a debt free/cash free basis.
The total consideration of up to EUR6.20m 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 paid at completion was EUR3.84m, with
deferred consideration of EUR0.96m to be paid on the first
anniversary of completion. Up to a further EUR1.40m is payable
contingent upon the achievement of certain targets relating to the
future financial performance of Topfloor (the "Earn-out"). Further
information on the terms of the acquisition is set out below.
About Topfloor Systems Limited
Topfloor is an established supplier of software services for the
property sector with a strong reputation for its cloud based SaaS
solutions Blockman and Letman used by property agents, property
owners, landlords and tenants.
Blockman is a service charge, ground rent, client accounting and
administration tool providing advanced report and document
generation for apartment block and estate managing agents.
Letman is a tenancy administration and client rent accounting
tool for property management agents involved in the letting and
management of residential properties.
Topfloor has high client retention rates and in excess of 95% of
revenues arise from annual recurring fees from its circa 300
clients across Ireland and the United Kingdom.
Niall Wrafter (CEO) and Cathal Browne (CTO), both shareholders
of Topfloor, will remain with the business, entering into new
employment contracts and will continue to lead the team of eight
staff located in Ireland. Founding shareholder George Murphy is
leaving.
The unaudited financial statements for Topfloor for the year
ended 31 August 2022 reported revenue of EUR1.59m, EBIT of EUR0.37m
and closing net assets of EUR0.98m. The reduction in operating
costs associated with the departure of George Murphy and the new,
normalised, contractual arrangements for Niall Wrafter and Cathal
Browne will lead to an immediate increase to the profitability of
Topfloor.
Acquisition Rationale
The addition of Topfloor further extends Grafenia's range of
vertical market niche SaaS software companies t hat generate
revenues of a recurring nature.
Terms of the Acquisition
The EUR3.84m initial consideration was funded from existing
Grafenia cash reserves and the proceeds of the bonds issued by the
Company announced on 20 January 2023.
The EUR0.96m deferred consideration and Earn -- out, if payable,
of up to EUR1.40m, will be satisfied in cash.
The Earn-out is dependent on Topfloor achieving certain annual
recurring revenue targets and may be achieved in full or in part by
exceeding those targets in any of the three financial years
commencing 1 September 2023 ("Earn-out Period").
Gavin Cockerill , Acting CEO of Grafenia said: "We're delighted
to announce our fourth acquisition of the financial year, adding
Topfloor to the growing stable of Vertical Market Software
businesses in Grafenia's portfolio. Meeting our acquisition
criteria extremely well, Topfloor is a great example of the kind of
business our Software Circle team are actively searching for. We
have been very impressed with Niall and Cathal from the outset and
are excited to work with them and the Topfloor team in the years
ahead."
Niall Wrafter commented: "Having been a shareholder of Topfloor
for many years, George was ready to exit whilst Cathal and I have
ambitious plans for the business. Grafenia can help us achieve
those aims and is the ideal home for Topfloor moving forward. We
are enthused and energised at the prospect of growing the business
and taking it to the next level under Grafenia's ownership."
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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February 17, 2023 07:35 ET (12:35 GMT)
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