Ideagen plc (LON:IDEA) has acquired Qualsys Ltd, a supplier of electronic quality management software, for £15.6mln in cash.
The AIM-listed information management software group said the acquisition is expected to contribute £600,000 to its adjusted earnings (EBITDA) in the current financial year to April 30, 2021, and £1.5mln in the following year.
Ideagen noted that the acquisition will provide a “strong growth opportunity” by accelerating the existing development roadmap of its Q-Pulse product by integrating the seventh version of Qualsys’ electronic quality management system.
The company said the acquisition will be funded through its existing cash and debt resources.
“Qualsys has a resilient business model, a quality customer base, outstanding technology and a strong team. Qualsys V7 will be an important product for Ideagen as we integrate the software into our cloud platform and accelerate the ARR growth through our proven and established sales engine", Ideagen chairman David Hornsby said in a statement.
The company also revealed in a brief update that trading in its first quarter has “remained robust” and that demand for its products has continued among new customers and its existing client base.
Sectors such as financial services, pharmaceutical and US Federal were “performing particularly well” with several notable contract awards, while Ideagen said it is starting to see “increased business activity and a growing pipeline within manufacturing”, although aviation remained suppressed but stable due to the coronavirus pandemic.
“Our business model remains resilient; customer retention across all verticals has been consistent with normal business conditions and net cash generated from operations being as expected, with neither materially affected by [coronavirus]. The board therefore has every confidence that the business will continue to perform in line with market expectations over the coming months”, the group concluded.
In a note on Monday, analysts at house broker finnCap increased their revenue and EBITDA forecasts for Ideagen’s 2021 financial year by 4% and 3% respectively “to reflect the contributions of Qualsys”, while also retaining their 220p target price on the stock.
The company’s shares were 4.3% higher at 183.5p in mid-morning trading.
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