Ideagen buys software company IPI Solutions for £5.5m

AIM-listed supplier of information management software Ideagen announced the acquisition of software company IPI Solutions for £5.54m.

Ideagen said the deal – which is expected to be immediately earnings enhancing – is in line with its strategy of acquiring complementary businesses with strong IP and recurring revenues.

Mansfied-based IPI has around 400 customers across the aerospace and defence, complex manufacturing and life sciences verticals, including GE Aviation and Meggitt.

For the year to the end of September, the company generated earnings before interest, taxes, depreciation and amortisation profits of £0.6m after adjusted for £0.26m of costs relating to the former owners of the business which will not recur.

EBITDA is expected to increase to a run rate of £0.8m in the year ending 30 April 2018 as certain contracts are delivered and recurring revenues are recognised.

Chief executive officer David Hornsby said: “IPI is a valuable addition to the group and is in line with our strategy of acquiring business that have strong IP and healthy recurring revenues. IPP has established an extremely compelling value proposition and brings to the group a complementary solution offering, a talented workforce and long-term customer relationships which further consolidates our position in the aerospace and defence, complex manufacturing and life science verticals."

At 1105 GMT, the shares were up 5.2% to 66.25p.