CV Check Ltd (ASX:CV1) is trading 20% higher after entering into a binding share purchase agreement to acquire 100% of CI6 Pty Ltd, an entity that owns 100% of Bright People Technologies Pty Ltd and associated group entities.
Established in 2002, Bright People is a SaaS cloud-based provider of workforce credentials and compliance software through the Enable and Cited brands.
The combination of CV1 and Bright will create a credentials-based workforce management capability built on Bright’s workforce compliance strength and the CVCheck platform’s highly automated verification workflows and HRIS integrations.
Shares have been up to 20 per cent higher to 21 cents intra-day, a new high of almost 18 months.
“Truly transformative”
CV Check chairman Ivan Gustavino said: "Bright is an excellent strategic fit to CV1. Combining our complementary platforms and products will create a credentials-based workforce management capability to address growing demands from our existing and future customers.
“In addition to the obvious synergies of combining the two companies, technical capabilities and experience of both teams, it will also see CV1 expand by adding accretive SaaS- based revenues.
“This is truly transformative."
Bright chairman Jon Birman said the union with CV1 delivered superior market access with contemporary and proven technology, positioning the combined entity perfectly for rapid local and international growth.
Acquisition terms
The acquisition has an enterprise value of approximately $15.3 million, with $12 million in scrip issued at completion.
In consideration for the acquisition of 100% of the issued capital of CI6 Pty Ltd, the company has agreed to:
- Issue around 73 million CV1 fully paid ordinary shares at completion; and
- Pay Bright’s net debts up to $3.25 million.
Consideration shares are to be held in voluntary escrow until December 31, 2022.
CV1’s largest shareholder, the Carolan Family (~16%), has given a statement that they intend to vote in favour of the acquisition.
Bright’s clients include BHP, Roy Hill, Woodside, Atlas Iron, WaterCorp and the NT Government.
Chairman and largest shareholder Jon Birman will be appointed to the CV1 board as a non-executive director while Bright executives Petra Nelson and Declan Hoare will join the CV1 executive management team.
For the acquisition, Sternship Advisers acted as financial adviser and Steinepreis Paganin as legal adviser to CV1.
The transaction is conditional on CV1 shareholder approval, certain conditions precedent and customary closing conditions.
Capital raising
CV Check has also completed a $10.5 million placement of new shares at an issue price of 16.5 cents per new share, which was supported by new and existing institutional investors, including the company’s largest institutional investor, Australian Ethical Investment Limited.
The placement will result in the issue of around 63.6 million new shares which will rank equally with existing CV1 shares.