Proactis to buy Millstream Associates for £15.5m

Proactis, a spend control software provider, has agreed to buy Millstream Associates, a provider of e-procurement systems and services to the public sector, for £15.5m as part of its growth strategy.

The payment will be on a cash free and normalised working capital basis funded by a placing of about 9.2m shares of 10p each at 135p to raise about £12.5m and a revolving credit facility of £6m.

The AIM-listed company said Millstream, which is expected to be earnings enhancing, is complementary to its existing business and part of its expansion strategy to grow through acquisitions, the company said in a statement.

Chief executive Rod Jones said: "The acquisition broadens both the product offering and the customer base on the buy side of the procurement process whilst also bringing scale of operation on the strategically important supply side of the procurement process.

“Millstream is a clear complementary fit to the group and provides some potential upside with cross-selling opportunities into both the Proactis and Millstream customer bases."

For the year ended 30 June, Millstream reported revenues of £4.9m and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £2m.

Shares in Proactis were up 13.36% to 139.99p at 1045 GMT.