Fri, 23 Sep 2022 | BUSINESS SALE
Grafenia Plc, a listed business that operates a buy-and-build strategy targeting global software-as-a-service (SaaS) and licence brands, has agreed to acquire Plymouth-based e-commerce software firm Vertical Plus in a deal worth up to £2.88 million.
The deal value would represent slightly over an 11.5x multiple of Vertical Plus’ EBITDA of £0.25 million for the year ending March 31 2022, generated on turnover £2.01 million. At that time, Vertical Plus’ net assets were valued at £1.29 million.
The fee is comprised of an initial cash consideration of £1.25 million, to be paid upon completion, followed by a £1 million consideration, to be paid one year post-completion. Up to £0.63 million in further considerations is payable over three years, dependent on Vertical Plus achieving certain targets relating to its future financial performance.
Completion of the deal is conditional on Vertical Plus' minority shareholders completing short form sale and purchase agreements and Grafenia raising funds via a bond facility that was put in place in 2020. Grafenia is aiming to raise £4.25 million through a bond issue, with £1.25 million to be used on the initial consideration for Vertical Plus.
The remaining balance will be used to finance other potential acquisitions currently in Grafenia’s pipeline. These potential deals have combined turnover of around £4 million and adjusted EBITDA of around £1.3 million. Valuations for these businesses are typically around 4-5x adjusted EBITDA.
Vertical Plus was founded in 2001 and provides an array of growth-focused e-commerce services to customers on a fully managed basis. The firm’s software is designed to enable and simplify large inventory e-commerce implementation.
Grafenia’s acting CEO Gavin Cockerill commented: “We’re delighted to have Vertical Plus join Grafenia. It’s culturally and strategically aligned. The ecommerce solution we provide our Nettl partners can be enhanced with the solutions Vertical Plus provides. We’re excited about the growth potential our route to market could help bring. This is another step toward growing our software nucleus.”
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