Wetherby’s PROACTIS acquires eProcurement solutions provider for £4.5m

Wetherby-based PROACTIS Holdings PLC, the specialist Spend Control software provider, has acquired Due North Limited, a provider of eProcurement solutions, from its parent company Access Intelligence PLC, for £4.5m.

The acquisition is part of the company’s growth strategy with selective acquisitions.

Due North is a provider of eProcurement systems, with more than 300 clients principally in the UK Public sector. Its clients use Due North’s hosted software to control an estimated £100bn of spend through approximately 200,000 active suppliers by approximately 20,000 procurement professionals.

Due North’s expertise in the UK Public sector is complementary to PROACTIS’ business and the combination offers the opportunity for Due North’s clients to access the broader solutions offered by PROACTIS, as well as substantial operational synergies in the short and medium term.

The acquisition is expected to be immediately earnings enhancing.

For the audited year ending 30 November 2014, Due North reported revenue of £2m on which it made an operating profit of £500k and its reported net assets were £2.3m.

For the financial year ending 30 November 2015, Due North’s unaudited management accounts report a revenue contribution of £1.8m with EBITDA of £400k and profit before tax of £200k. The total value of the net assets being disposed of as at 30 November 2015 was approximately £2.5m.

The acquisition is for a gross cash consideration of £4.5m, which PROACTIS will fund through a combination of bank debt and its own cash resources. The bank debt will be provided by HSBC Bank plc, by way of a term loan of £3m repayable over four years at an interest rate of 1.85% per annum over LIBOR.

Rod Jones, CEO of PROACTIS, commented: “I am delighted to announce the acquisition of Due North which is an excellent strategic fit - consolidating the Group’s position as the largest independent eProcurement solution provider in the UK market.

“Due North’s market penetration is substantial and should immediately benefit the wider PROACTIS business. I look forward to working with the team at Due North to grow the business and provide the wider client base with our end to end solutions.”

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