Hot on the heels of last week’s CompliSpace acquisition, information management software firm Ideagen has acquired software validation and assurance company CompliancePath for £9 million.
CompliancePath, based in the US and UK, is focused primarily on the healthcare and life science sectors. Initial consideration of $6 million (£4.5 million) is payable in cash plus a conditional deferred earnout of up to $6 million (£4.5 million), payable over the next two years, “linked to strong revenue and earnings growth”.
There are no details about any jobs cuts in the announcement. CompliancePath is headquartered in Glasgow with 20 employees listed on LinkedIn. The firm says it has “Scottish roots, global reach”.
Nottingham-based Ideagen provides software and services to more than 6,000 customers across industries such as aviation, financial services, life sciences, healthcare and manufacturing with operations throughout the UK, US, Europe, Middle East and South-East Asia.
Today’s (15 November) acquisition of CompliancePath is Ideagen’s 25th since its admission to the UK AIM market.
CompliancePath recorded pro-forma revenues of approximately $2.1 million (£1.5 million) and profit before tax of $900,000 (£670,000) in the 12 months to 30 September 2021 with net assets of $1.5 million (£1.1 million) at that date. This acquisition was funded from Ideagen’s existing resources.
CompliancePath was founded in 2008 and opened a European head office in 2011. In 2018 it opened its Computer Validation & Software Quality Assurance Test Centre in Glasgow. This year it opened its second test centre in Bridgetown, Barbados.
Along with the acquisition, Ideagen provided a trading update for the first half of the year up to 31 October 2021.
The company expects to report total revenue for the first half up 33% at approximately £38.8 million (H1 2020: £29.2 million). Recurring revenue recognised in the period grew by 41% to £34.2 million, representing 88% of total revenues (H1 2020: 83%). Total revenue grew organically at 6% (H1 2020: -2%), whilst organic recurring revenue growth was 10% (H1 2020: 10%).
Adjusted EBITDA is expected to increase by 32% to approximately £13.2 million (H1 2020: £10 million), reflecting a margin of 34% (H1 2020: 34.5%).
Ben Dorks, Chief Executive Officer of Ideagen, says: “Ideagen delivered a robust performance in the first six months, which not only reflects the strength of our business model and the merits of SaaS, but also the investment in our people, our products, and our customers.”
He adds: “Since the first half ended, I am pleased to have completed four acquisitions with significant synergy opportunity and welcome these products and teams to the group.”
As eWeek UK reported last week, Ideagen made its biggest acquisition to date with the purchase of Sydney-based regtech provider CompliSpace for AU$105 million (£57.7 million).
According to Ideagen, its acquisitions have increased the group’s total annualised pro-forma revenues to approximately £97.3 million and its ARR to approximately £86.3 million. This represents ARR growth of 34% since 30 April 2021, of which 7% is organic (approximately 13% organic growth on an annualised basis). Net debt is approximately £84.1million at the date of this announcement following the acquisition of CompliancePath.