Eckoh PLC (AIM:ECK, OTC:EKTPF) struck a deal to buy secure payments solutions rival Syntec for £31mln in cash and shares.
A £13.7mln placing has been launched to raise part of the £24.7mln cash element of the transaction, with £8mln from Eckoh's existing cash resources, £6.3m payable in new Eckoh shares and the balance to be funded by a new debt facility.
The placing is priced at 54p per share, with the shares to be issued representing up to approximately 9.96% of the company's ordinary share capital.
UK-based Syntec is an Ofcom-regulated network operator under the brand CardEasy, with a patent portfolio in the UK, US, EU and Australia.
As of the end of November, Syntec had 31 employees, 29 of whom are based in the UK and 2 in the US, serving over 100 clients in the US and Europe, including Wayfair, Miele, Staples, AIB and Hiscox.
Eckoh said the acquisition will consolidate its market leading position in customer engagement data and payment security and enhance its position as the largest provider of contact centre secure payment products in a growing US market benefiting from structural trends.
“The directors believe Syntec's product capabilities and client network will enable Eckoh to accelerate this momentum and bolster its new business pipeline as the UK market continues to normalise. In the US, Syntec has seen fast growing levels of activity and accelerating revenues for both on site and cloud deployment products.”
Syntec, which generated gross profit of £2.5mln from revenue of £3.6mln in the second half of 2020, has “shown capability in winning new business through remote selling” and Eckoh directors believe the acquisition will enable it to combine this remote model with its sales strategy to boost the pipeline of new business opportunities.
Syntec has an “extensive and attractive portfolio” of 11 patents that will bring complementary IP to Eckoh's 17 international patents, with Syntec’s technology “building on the company's current product offering without incurring significant overhead costs”.