Franchise Brands PLC (AIM:FRAN) said it is acquiring the maker of franchise management software it currently uses for a ‘net’ £825,000 – a deal that is expected to be earnings enhancing in the first full year.
It has worked with Azura Group Ltd since 2018, and FB says the purchase “consolidates and secures” its technology development and IP at a time when it is “embarking on a further, still more ambitious digital journey”.
Chairman Stephen Hemsley added: “Given the ever-increasing importance of technology to the Group and the role Azura has played in the development of our "Vision" works management system at Metro Rod and Metro Plumb, the acquisition of Azura has a strong strategic and commercial rationale in that it consolidates and secures our software development and key IP, as well as bringing an excellent team.
"We also see an opportunity to grow Azura through combining Franchise Brands' resources, expertise and experience with Azura's pre-eminent franchise management SaaS platform to enhance sales to other franchise businesses both in the UK and overseas."
The nuts and bolts of the transaction are as follows: FB is handing over a total of £1mln with £850,000 of that in cash and remainder paid in stock. Azura has said there will be cash on the balance sheet of ‘not less than’ £175,000, making the transaction cost £825,000.
In the year ended April 30, Azura’s revenues were £501,000 and its pretax profit £106,000.