UK's Ideagen buys software firm Scannell Solutions in €4m deal
Software company Scannell Solutions has been acquired by AIM-listed Ideagen for £3.5m (€3.9m).
Ideagen said it's paying an initial £3m for Scannell Solutions, with the remainder deferred for 12 months.
It added that the Irish software company is generating annual revenues of about €1m, of which €700,000 is recurring, and that the firm is operating at a break-even level.
The Cork firm was founded by Mary Scannell, who is its chief executive.
It has about 100 customers including Coca-Cola, BASF, Bentley, ESB, and Heineken.
Its software is used to provide companies with a fully-integrated environmental health, safety and quality (EHSQ) solution.
Ms Scannell established the company in 1998, having worked prior to that with international consultancy group RPS.
She had also previously worked for packaging giant Smurfit, having joined the group as a fast-track graduate.
The latest set of publicly available accounts for Scannell Solutions show that it made about a €113,000 profit in its 2018 financial year.
Ideagen said the acquisition will be earnings-neutral in the current financial year, and will contribute an extra €300,000 in earnings before interest, tax, depreciation and amortisation in the first full year of ownership following the realisation of synergies.
Ideagen, with a £269m (€301m) market capitalisation, also supplies safety management software and has customers across multiple sectors, from aviation to health services.
The UK firm's executive chairman, David Hornsby, said Scannell Solutions is a "valuable addition" to Ideagen and in line with the group's strategy of acquiring governance, risk management and compliance businesses "that have strong IP and recurring revenues".
"EHSQ is a fast-growing market and the acquisition will significantly enhance our product and market position," he said.
Scannell Solutions backers include Enterprise Ireland, which initially invested €80,000 in 2003 by way of convertible shares. It invested €150,000 in 2005 by way of convertible preference shares.
The company's ownership is split between Ms Scannell and a handful of other individuals.