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LoopUp to buy MeetingZone for £61.4m in cash
AIM-listed remote meetings company LoopUp Group has agreed to buy Warwick Holdco, the holding company for conferencing services provider MeetingZone, for £61.4m in cash.
MeetingZone, which is being purchased on a debt-free and cash-free basis from GMT Communications Partners, has around 6,000 customers worldwide and international operations in Germany, Sweden and North America.
LoopUp said the business has a consistent track record of profitability and grew to revenue of £22.5m, gross profit of £15m and adjusted earnings before interest, taxes, depreciation and amortisation of £5m in the 12 months ended 31 December 2017.
The consideration for the deal will funded from the proceeds of a placing of 12.5m new ordinary shares at 400p each - to raise £50m - and a new £17m term loan from Bank of Ireland. The company will also have access to a £3m revolving credit facility, also provided by Bank of Ireland.
The deal is expected to generate "attractive" cost savings of around £0.5m in the year to the end of December 2018 and at least £2.8m from the first full financial year of ownership to 31 December 2019.
Co-chief executive officer Steve Flavell said: "The acquisition of MeetingZone will help us to enhance our already strong competitive position, add significant scale to our business and amplify the network effect of our offering. It will also provide us with an opportunity to reinvest further in our business, in particular our people, product and our 'Pods'.
"We thank all of the existing and new shareholders who have supported this proposed acquisition and who, like us, see it as an exciting opportunity to expand LoopUp's position and drive long-term growth."
At 1250 BST, the shares were up 6.9% to 465p.