TIDMSPA
RNS Number : 2969Y
1Spatial Plc
08 May 2019
8 May 2019
1Spatial plc (AIM: SPA)
("1Spatial", the "Company", and together with its subsidiaries,
the "Group")
Placing, Acquisition of Geomap-Imagis and Agreement with
Esri
Introduction
1Spatial, the global geospatial software and solutions company,
is pleased to announce that the Group has entered into two separate
share purchase agreements (each a "SPA") to acquire the entire
issued share capital of Geomap-Imagis Participations
("Geomap-Imagis") (the "Acquisition"), for total consideration of
EUR7.0 million (the "Consideration"). As at 6 May 2019, the
business had net cash of approximately EUR1.9 million. In order to
fund the cash element of the Consideration, 1Spatial also announces
a placing to raise GBP3.1 million (gross) (the "Placing") through
the issue of 9,871,220 new ordinary shares in the capital of the
Company (the "Placing Shares") at a price of 31.5 pence per share
(the "Placing Price"), a discount of approx. 5 per cent. to the
closing middle market price on 7 May 2019.
Alongside and in conjunction with the Acquisition, 1Spatial
France and 1Spatial Belgium (together, "1Spatial Europe") has
entered into a new partnership agreement with Esri Inc. ("Esri")
(the "Partnership Agreement").
The Company believes that the Partnership Agreement, combined
with the Acquisition, will be of significant benefit to the
Company's existing European customers in providing them with access
to Esri's market leading global GIS platform. In addition to being
immediately earnings enhancing, the acquisition offers a
combination of specialised vertical business applications and
significant 'know-how' in the Group's target sectors, which can be
delivered through the combination of 1Spatial Europe and
Geomap-Imagis.
HIGHLIGHTS
- New strategy for 1Spatial France and 1Spatial Belgium
division, bringing alignment to the Group's strategy to be a
software-enabled solutions provider where location and geospatial
data is key, with the goal to become a leader in Location Master
Data Management
- Acquisition of entire share capital of geospatial software
solutions company Geomap-Imagis for a total consideration of EUR7.0
million
- Geomap-Imagis offers strong strategic fit with the Group - the
acquisition is highly synergistic and is expected to be immediately
earnings enhancing
- New agreement signed with Esri, strengthening and broadening
the ongoing Group's global partnership with Esri and the
distributor community
- Esri agreement offers 1Spatial Europe's existing customers the
benefit of access to Esri's world leading GIS platform, while
retaining the Group's specialised business applications and
extensive know-how
- Oversubscribed Placing to raise GBP3.1 million (gross) to
partially fund the cash consideration due in respect of the
Acquisition
Claire Milverton, CEO of 1Spatial, commented:
"We are delighted to announce this new partnership with our
global partner Esri and the acquisition of Geomap-Imagis. The deal
is immediately earnings enhancing and will significantly strengthen
our customer proposition and align our French and Belgian
businesses with the strategy of the wider Group as a solution
provider with a focus on industry aligned business applications and
Location Master Data Management.
Geomap-Imagis operates within 1Spatial's existing markets and is
an Esri Gold partner. The acquisition will provide a number of
vertically focussed software business applications and will add a
new vertical in Facilities Management, an area where we see great
potential for our Location Master Data Management offering. We
expect to be able to achieve a range of strategic synergies and it
offers substantial land and expand potential, in-line with our
stated strategy. We look forward to welcoming the Geomap-Imagis
employees and customers to the Group"
Gilles Camus, Director General of Geomap-Imagis, commented:
"We are very pleased to have agreed the deal with 1Spatial, a
company that has a customer base, technology platform and a
cultural vision very similar to ours.
The deal with 1Spatial will give Geomap-Imagis the financial and
organisational structure to grow in our current market in France as
well as leverage our vertically focussed business applications
globally".
Jack Dangermond, CEO of Esri, commented:
"This agreement is great news for our continued global
partnership and especially for our customers who will benefit from
this deeper alliance. We are always looking for opportunities to
bring the innovative capabilities of geospatial technology to a
broader array of users, especially in growing areas like facilities
management."
- -
For further information, please contact:
1Spatial plc 01223 420 414
Andrew Roberts / Claire Milverton / Nicole Payne
N+1 Singer 020 7496 3000
Shaun Dobson / Lauren Kettle (Corporate Finance)
Tom Salvesen / Mia Gardner (Corporate Broking)
FTI Consulting LLP 020 3727 1000
Dwight Burden / Alex Le May
LEI Code: 213800VG7OZYQES6PN67
The Acquisition
Geomap-Imagis is a geospatial solutions company with a head
office in Nimes, southern France, dedicated to providing business
applications to the key sectors of Transport, Government, Utilities
(including Telecoms) and Facilities Management vertical
markets.
Combined with the 1Spatial Europe business, the Board considers
there to be significant benefits of the Acquisition to its French
and Belgian business, as well as for the enlarged group. These
benefits include:
- Aligned customer vertical markets in Government, Utilities,
Transport and Facilities Management;
- Aligns to Group's global strategy of being a technology
enabled, business applications and solutions provider to the
geospatial market in its chosen key vertical sectors;
- Increased scale and market access to customers;
- Strengthening the Group's existing solutions portfolio with
additional technology-based solutions and business
applications;
- Stronger links with key global partner Esri for increased
market access and development of international software
solutions;
- Access to a skilled management team and workforce with domain expertise;
- An existing customer base of over 500, providing significant
cross-selling and land and expand opportunities for the enlarged
group
In the year to 31 December 2018, Geomap-Imagis generated
revenues of EUR7.7m, adjusted EBITDA of EUR0.8m and profit after
tax of EUR0.6m. The company employs 66 members of staff across two
offices in France and has a 61-man flexible offshore workforce in
Tunisia.
Agreement with Esri
In early 2017 the Company undertook a full strategic review in
order to develop a clear direction for growth within the Group; the
result of which was the adoption of a strategy to focus on
Geospatial sector solutions and business applications, and the
Group's Location Master Data Management SaaS platform.
While this strategy has been adopted with ever-increasing
success in the UK, USA and Australia, in 1Spatial Europe the
Group's platform and go-to-market strategy differs slightly, and it
has become increasingly clear to the Board that to realign the
direction of the division with the rest of the business organically
would require significant further investment. Furthermore, 1Spatial
Europe has historically more often found itself in direct
competition with Esri in its French-speaking regions, which is in
contrast with the rest of the Group, where it considers itself to
be a strategic global partner.
The Partnership Agreement with Esri enables 1Spatial Europe's
existing clients, should they wish, to migrate to an Esri platform
while remaining retained customers of the Company. The terms of
Partnership Agreement also provide for training for the 1Spatial
team on the Esri software products, in order to facilitate the
smooth migration of existing clients. The migration of 1Spatial
Europe customers will enable the division to redirect its focus to
the development of analytic software and business tools, assisted
and accelerated through the addition of Geomap-Imagis.
The Share Purchase Agreements
The first SPA, between 1Spatial, its wholly owned subsidiary
1Spatial France SAS ("1Spatial France"), and certain individual
shareholders (the "Majority Vendors"), relates to 80 per cent. of
the voting rights of Geomap-Imagis (the "Majority SPA") and the
second SPA, between 1Spatial France and Esri France, relates to the
remaining 20 per cent. of the voting rights of Geomap-Imagis (the
"Esri SPA"). The SPAs have been entered into concurrently and are
inter-conditional.
Under the terms of the Majority SPA, the Group shall pay to the
Majority Vendors total consideration of EUR5,600,136, of which
EUR4,433,137 is to be satisfied in cash (the "Majority Cash
Consideration") by 1Spatial France with the balance of EUR1,166,999
to be satisfied by the issue by 1Spatial of new ordinary shares in
the capital of the Company (the "Consideration Shares").
Of the Majority Cash Consideration, EUR4,024,135 is to be paid
by 1Spatial France to the Majority Vendors immediately upon
completion of the Acquisition ("Completion"), with the balance of
EUR409,002 to be held in escrow until the first anniversary of
Completion.
Of the consideration to be satisfied by the issue of the
Consideration Shares, EUR726,459 will be satisfied immediately upon
Completion and the balance of EUR440,540 will be satisfied on 30
March 2023. Accordingly, the Company has issued, conditional on
Completion, 1,902,686 new ordinary shares (the "Initial
Consideration Shares") at an effective price of 32.68 pence per
Initial Consideration Share. The Initial Consideration Shares are
subject to a lock up obligation until 31 December 2021.
Under the terms of the Esri SPA, 1Spatial France shall pay cash
consideration of EUR1.4 million; half upon Completion and half no
later than 13 months following the Completion date (The "Second
Installment"). 1Spatial has granted a guarantee to Esri France to
secure the payment of the Second Installment.
The cash consideration payable under the terms of the SPAs will
be funded from proceeds of the oversubscribed GBP3.1 million
Placing and the Company's existing cash resources. In addition, as
at 6 May 2019, Geomap-Imagis had net cash of approximately EUR1.9
million. Following admission of the Initial Consideration Shares
and the Placing Shares, the Initial Consideration Shares will
represent 1.72 per cent. of 1Spatial's enlarged voting share
capital.
Financial Results
The Group expects to release its financial results for the year
ended 31 January 2019 on 14 May 2019. As confirmed in its trading
update in March 2019, the Group traded in line with expectations in
FY19, and in its financial results expects to confirm the
following;
FY18 FY19
(GBPm) (GBPm)
Revenue* 16.9 17.6
Solutions business revenues 10.6 12.2
GIS business revenues 6.3 5.6
GIS business revenues - IFRS 15 adjustment - (0.2)
Gross Profit 8.9 9.2
Gross profit margin 53% 52%
Adjusted EBITDA 0.4 1.2
Adjusted EBITDA margin 2% 7%
* As adjusted in FY19 for the impact of IFRS15
On a like-for-like basis at constant currency, revenues in FY19
increased by GBP0.9 million to GBP17.8 million, however following
the implementation of IFRS 15 ('Revenue from Contracts with
Customers') resulted in negative adjustments of GBP0.2 million to
the Group's FY19 GIS service revenues, giving Group adjusted
revenue for the year of GBP17.6 million.
In the year, the Group saw licence revenues increase by 12 per
cent. to GBP2.8 million (FY18: GBP2.5 million), services revenues
increase by 11 per cent. to GBP8.0 million (FY18: GBP7.2 million)
and support and maintenance revenues decrease by 3 per cent. to
GBP7.0 million (FY18: GBP7.2 million).
The Placing
The Company has raised GBP3.1 million (gross) through the
conditional allotment of the Placing Shares at the Placing Price,
which represents a discount of approx. 5 per cent. to the closing
middle market price on 7 May 2019, being the latest Business Day
prior to the release of this announcement.
Pursuant to the terms of a placing agreement entered into
between the Company and N+1 Singer in relation to the Placing (the
"Placing Agreement"), N+1 Singer has conditionally agreed to use
its reasonable endeavours, as agent for the Company, to place the
Placing Shares with certain institutional and other investors. The
Placing has not been underwritten.
The Placing Agreement contains warranties from the Company in
favour of N+1 Singer in relation to, inter alia, relating to the
Group and its business. In addition, the Company has agreed to
indemnify N+1 Singer in relation to certain liabilities it may
incur in respect of the Placing. N+1 Singer has the right to
terminate the Placing Agreement in certain circumstances prior to
Admission, in particular, in the event that any of the warranties
given to N+1 Singer in the Placing Agreement are untrue or
inaccurate in any respect; the failure of the Company to comply in
any material respect with its obligations under the Placing
Agreement; the occurrence of a force majeure event or a material
adverse change affecting the condition, the earnings or business
affairs or prospects of the Group as a whole, whether or not
arising in the usual course of business or; any statement contained
in the Placing Agreement in relation to the Placing is or has
become untrue.
Admission
Application has been made for the Placing Shares to be admitted
to trading on AIM, with dealings expected to commence at 8 a.m. on
10 May 2019. Application will be made for the Initial Consideration
Shares to be admitted to trading on AIM, with dealings expected to
commence at 8 a.m. on 15 May 2019. Following the issue and
admission of both the Placing Shares and the Initial Consideration
Shares, the Company will have a total of 110,805,795 ordinary
shares of 10p each ("Ordinary Shares") in issue, including 319,635
Ordinary Shares held in treasury. Accordingly, the total issued
share capital with voting rights following admission of both the
Placing Shares and the Initial Consideration Shares will be
110,486,160.
About 1Spatial
1Spatial is a technology-enabled solutions provider supplying
vertically-focused business applications to industry sectors where
the accuracy of location and geospatial data is key. It is a global
leader in managing geospatial data, with the goal to be a market
leader in Location Master Data Management.
1Spatial provides its customers with business-focused
applications where there is a reliance on location or geospatial
data. It delivers real value by using its patented 1Integrate tool
to ensure that the underlying data is current, complete and
consistent through the use of automated processes. This ensures
that decisions are always based on the highest quality information
available.
Our global clients include national mapping and land management
agencies, utilities, transportation organisations, government
departments, emergency services, defence and census bureaus.
Today - as location data from smartphones, the Internet of
Things and great lakes of commercial Big Data increasingly drive
commercial decision-making - our technology is used by a wide range
of commercial and government organisations from utilities and
transport businesses, to facilities management companies.
1Spatial plc is AIM-listed, headquartered in Cambridge, UK, with
operations in the UK, Ireland, France, Belgium, Australia and
USA.
For more information visit www.1spatial.com
About Geomap-Imagis
Geomap-Imagis is a geospatial software solutions provider
focussed on key markets of Transporation, Government, Utilities
(including telecommunications) and Facilities Management. The
company provides solutions which include ready to market business
applications which are Esri platform compliant but also
interoperable with other software such as CAD and BIM.
The company's approach is customer orientated with the focus on
the customer needs for the business applications. The company has
significant Esri and domain expertise and provides solutions which
include software, consultancy, training, integration and
support.
The Company's primary market is in France with its Head office
in Nimes and an offshore facility in Tunisia.
About Esri
Founded in 1969 and headquartered in Redlands, California, Esri
is the global market leader in geographic information system (GIS)
software, location intelligence, and mapping. The company offers
Esri Geospatial Cloud, the most powerful geospatial cloud
available, to help customers unlock the full potential of data to
improve operational and business results. Today, Esri software is
deployed in more than 350,000 organizations including 90 of the
Fortune 100 companies, all 50 state governments, more than half of
all counties (large and small), and 87 of the Forbes Top 100
Colleges in the U.S., as well as all 15 executive departments of
the U.S. Government and dozens of independent agencies. With its
pioneering commitment to geospatial information technology, Esri
engineers the most advanced solutions for digital transformation,
the Internet of Things (IoT), and advanced analytics.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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