Highlights:
- £30m to be paid in cash on completion (subject to adjustments for net debt and net working capital on completion) plus £2m in a rollover investment into the sold business and an additional £3m earn-out tied to 2018 and 2019 revenue performance;
- Assuming completion of the transaction, IQGeo Group plc (as the Company is proposed to be renamed on completion of the Sale – please see below) will be a focused and well-funded geospatial software company working with telecoms and utilities companies worldwide;
- The RTLS SmartSpace business unit liabilities arising as a result of the Reorganisation and Completion are expected to comprise a £0.8m tax liability and £2.3m lease liabilities (IFRS 16). The Group’s £1.75m HSBC loan is also classified as an RTLS SmartSpace business unit liability which will be repaid on completion;
- In the audited results for the year ended 31 December 2017, the IQGeo business generated revenue of £16.5 million and a contribution of £4.4 million, and in the unaudited first half results for the period ending 30 June 2018, the IQGeo business generated revenue of £5.7 million and a contribution of £1.3 million;
- Part of the consideration from the disposal of SmartSpace will be used to continue the globalisation of IQGeo, in particular in markets where fiber broadband and 5G investments are expected to increase significantly over the next five years;
- Cash balances of the Group have increased to £6.8m as at 16 Nov 2018 from £5.8m as at 30 June 2018;
- Following completion of the Sale, the Board intends to return excess funds to Shareholders (subject to complying with all relevant law and regulation in effecting such return). Further details of the amount and timing of the return to shareholders will be made in due course.
The Board believes that the terms of the Sale are highly attractive and appropriately value the future growth of the RTLS SmartSpace business against the uncertain nature and timing of that growth.
Completion of the Sale is conditional on, among other things, the approval of the Company’s shareholders (the “Shareholders”) and accordingly, a shareholder circular will be posted shortly for the purpose of calling a general meeting of the Shareholders (the “General Meeting”). Details of the General Meeting as well as further information on the Sale and the conditions to completion of the Sale are set out below. Completion of the Sale is expected to occur in December 2018.
Ubisense Group plc will (assuming the Sale completes and becomes unconditional in all respects) be renamed IQGeo Group plc (IQGeo) and will focus on the compelling market opportunities in the Company’s “myWorld” product offering. A resolution to approve the change of the Company’s name will also be proposed at the General Meeting and, should the name change be approved, the shares of IQGeo will trade on AIM under the ticker “IQG”.
Richard Petti, CEO of Ubisense Group plc said: “This is an extremely positive change for both the RTLS SmartSpace and the IQGeo divisions which the Board believes is in the long-term best interests of both businesses. The proceeds will allow us to refocus and re-brand the retained business as IQGeo and to invest in its myWorld software business which has a significant market opportunity providing solutions to some of largest telecoms and utilities suppliers in the world.
As I look ahead to the potential for IQGeo, I am excited about the prospect of building on the success of our myWorld enterprise software which has increased revenues by a CAGR of more than 35% since 2015. We have an excellent existing customer base across our target markets and a growing pipeline of new opportunities driven by worldwide growth in fiber broadband and 5G technology. From day one, the mission of the IQGeo team will be to build on existing foundations to create a global software business, with high levels of recurring revenues, high margins and strong cash flows”.
Read the full story