7 May 2024
AdvancedAdvT Limited
Acquisition of Celaton and year-end trading update
AdvancedAdvT Limited (AIM: ADVT,
"AdvT", "the Group"), the international software solutions provider
for the business solutions, healthcare compliance, and human
capital management sectors has agreed to acquire Celaton Ltd
("Celaton"), the operator of an intelligent document processing
platform inSTREAM (the "Acquisition"), for cash consideration of
£5.0 million net of cash acquired of £1.5m1.
The Group has also published a
year-end trading update for the eight months to 29 February
20242.
Acquisition highlights
· Acquisition of the entire share capital of Celaton for cash
consideration of £5.0 million net of cash acquired, funded from the
Group's existing cash resources.
· Celaton is a machine-learning AI based intelligent process
automation (IPA) platform (inSTREAM). Functionality provides
intelligent document processing (IDP) with automatic data
recognition, classification, validation and enrichment, continual
process automation with machine-learning AI algorithms and
analytics.
· Celaton is highly complementary to AdvT's existing
business:
o IBSS3 clients are expected to be the primary
beneficiaries of the acquisition.
o IBSS
clients working within end-to-end business
processing, accounts payables and sales order processing automation
will benefit from InSTREAM's improved efficiency, throughput, and
enhanced compliance - providing mutual benefits to both the
customer and supplier relationship.
o Opportunity for both revenue and efficiency synergies across
the Group.
· In the
two years prior to this acquisition, Celaton invested £2.3m in
product development, targeted at platform AI capabilities, web user
interface and multi-language support - now aligned to support the
growth of the product into adjacent markets.
· Customers consist of multi-national well-known enterprises
with high volume e-invoicing and document process needs including
Talk Talk, Currys and Capgemini.
In the 12 months ended 30 June 2023,
Celaton recorded revenue of £3.3m, (80% recurring
subscription/transactional) with EBITDA4 before
development costs of £1.2m5. As at 30 June 2023, Celaton
had net assets of £1.5m.
Completion of the Acquisition is
subject to and conditional upon National Security and Investment
Act approval and a further announcement will be made in due
course.
Year-end trading update
The Group expects to report good
progress against key financial metrics, providing a strong platform
for further growth, based on the unaudited financial results for
the eight months to 29 February 2024.
Revenues and Adjusted
EBITDA6 continued to perform well, ahead of
pre-acquisition trading benefitting from the actions outlined at
the time of the Group's interim results announced 28 March 2024.
Recurring revenues remain at approximately 77% of continuing
revenues.
Profit before tax will benefit from
the gain on the sale of Synaptic Limited in the order of £2.6
million, increase in fair value of investment in M&C Saatchi
plc in the order of £2.5 million and Interest income in the order
of £2.2 million.
Net cash and investments held as at
29 February 2024 totalled £102.9m. Net cash was £82.1m with a
further £20.8m held as an investment in M&C Saatchi
plc.
Vin
Murria, AdvancedAdvT's Executive
Chairperson, said
"Celaton operates within a market experiencing significant
rising demand for AI, automation and efficiencies. It will be
immediately beneficial to the wider AdvT client base, with its
e-invoicing, AI, document processing IP centric product. This is
especially timely considering the recent notice that a material
alternative supplier intends to withdraw from the market, creating
further immediate opportunities.
"This is a highly complementary, earning enhancing addition to
the Group, which will benefit from being part of a larger
business."
Related party transaction
The Acquisition constitutes a related party transaction for the purposes of
the AIM Rules for Companies. Vin Murria, a Director and
substantial shareholder of AdvT, and BGF Investment Management, a
substantial shareholder of AdvT, each own approximately 45% of
Celaton. In addition, Karen Chandler, a Director of AdvT, is Chief
Operating Officer and a minority shareholder of Celaton.
The Directors independent of
the Acquisition (Gavin Hugill, Mark
Bangstrup Watts, Paul Gibson and Barbara Firth) having consulted
with the Group's nominated adviser, Singer Capital Markets,
consider that the terms of the Acquisition to be fair and
reasonable insofar as shareholders are concerned.
1 Cash as at
30 April 2024.
2 The Group,
as previously announced, has changed its financial year to the end
of February.
3 Integrated
Business Software and Solutions Limited and IB Software and
Solutions (Ireland) Limited, together "IBSS".
4 "EBITDA"
defined as Earnings before Interest, Tax and
Amortisation.
5 Under
IFRS, the treatment of development costs are subject to
capitalisation.
6 Adjusted
EBITDA as defined in the Interim financial statements, excluding
non-trading costs such as Acquisition and AIM admission
costs.
Enquiries:
AdvancedAdvT Limited
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Vin Murria, Chairperson
Gavin Hugill, Chief Financial
Officer
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c/o Meare Consulting
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Singer Capital Markets (Nominated Adviser and
Broker)
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Tel: 020 7496 3000
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Philip Davies / Asha Chotai / Sam
Butcher
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KK
Advisory (Investor Relations)
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Tel: 020 7039 1901
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Kam Bansil
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Meare Consulting
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Adrian Duffield
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Tel: 07990 858548
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Note to Editors
AdvancedAdvT Limited (AdvT) provides
software solutions and platforms across two business
transformational areas: business solutions & healthcare
compliance, and human capital management.
The Group's operations are IBSS
(financial management software), CHKS (AI based healthcare
intelligence compliance and accreditation software), Retain (global
resource planning and talent management software) and WFM
(workforce management software provider).
AdvT is an agent for change. The
Group enables the delivery of Artificial Intelligence ("AI"), data
analytics and business intelligence, all of which are key future
drivers for growth in these sectors where long term digitisation
trends are set to transform the workplace for
professionals.
AdvT is developing both organically
and through acquisitions, by expanding its presence across adjacent
markets, geographical boundaries and digital sectors.