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Dods Group confirms purchase of acquired data services and software code provider Meritgroup for £22.4mln

The AIM-listed group said it is paying a mixture of cash and new ordinary shares for the deal and is currently concluding an equity fundraising process in order to cover the cash portion

Acquisition sign
As part of the fundraising, Dods also said it expects to provide an open offer to enable existing shareholders the opportunity to participate

Dods Group PLC (LON:DODS) has confirmed the purchase of acquired data services and software code provider Meritgroup for £22.4mln just one day after the events and publishing firm revealed it was in advanced and exclusive discussions about the deal.

The AIM-listed group said it is paying a mixture of cash and new ordinary shares for the acquisition and is currently concluding an equity fundraising process in order to cover the cash portion of the consideration.

READ: Dods warns on profits, blames Brexit uncertainties for “challenging trading conditions” in the UK

As part of the fundraising, Dods said it expects to provide an open offer to enable existing shareholders the opportunity to participate. It also proposes to enter into a new debt facility to part fund the acquisition.

It added: “The Board is confident in a successful outcome of the Fundraise and Lord Ashcroft, a 44% shareholder, is fully supportive of the Acquisition.”

The firm - publisher of Dods Parliamentary Companion and the PoliticsHome website - said the Merit acquisition will be "transformational" for the group and will enable it, among other things, to diversify its service offering into faster growing, higher margin activities.

Merit – which was established in 2004 in the UK and India – has reported a compound annual growth rate (CAGR) of over 20% across the last three years and has been profitable for the past seven years.

In the financial year ended 31 December, Merit generated revenues of approximately £9.2mln, adjusted underlying earnings of around £1.9mln and pre-tax profit of about £1.2mln.

In early afternoon trading on Tuesday, shares in Dods were 6% higher at 8.75p, having gained around 3% on Monday.

Quick facts: Dods PLC

Price: 5.75 GBX

AIM:DODS
Market: AIM
Market Cap: £31.97 m
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