Tax Systems acquires OSMO, completes board shuffle

Corporation tax software and services supplier Tax Systems announced on Tuesday that it acquired the entire issued share capital of OSMO Data Technology in return for the issue of 4,701,492 new ordinary shares of one penny each in the capital of the company.

The AIM-traded firm said at the mid-market closing price as on 3 April, it represented a value of £3.2m.

It said OSMO is a provider of automated data extraction software that connects to 295 versions of accounting software packages.

The strategic software acquisition enabled organisations to leverage data and automate parts of the end to end tax process, the board said, which in turn would help them comply with HMRC's ‘Making Tax Digital’ programme.

It also extended Tax Systems' solutions portfolio to further penetrate the company's existing customer base of over 1,050 clients.

OSMO's technology was sold on a software as a service basis, and for the year ended 31 December it generated revenue of £1.2m, of which over 75% was recurring, and adjusted EBITDA reached £0.1m.

In addition to the acquisition, the company confirmed that Gavin Lyons - formerly executive chairman - had been appointed chief executive officer to focus on the company's development.

Clive Carver, formerly non-executive director, was appointed non-executive chairman.

Kevin Goggin had been appointed chief financial officer, with Grahame Benson, finance director and chief operating officer, stepping down with immediate effect.

Paul Gibson was appointed as non-executive director.

“The acquisition of OSMO and the strengthening of the board are key steps in the development of the company,” said Gavin Lyons.

“With regards to the acquisition, tax departments are under increasing pressure to manage tax risk, leverage tax data and automate as much of the end to end tax reporting and compliance process as possible.

“OSMO's software is an excellent solution to help ease the manual workload associated with gathering data from accounting systems; this is a critical task which consumes a substantial amount of time and cost.”

Lyons also said he was “excited” to accept the role of CEO, having been executive chairman since the re-admission to AIM in July 2016.

“I am also very pleased to welcome both Kevin and Paul to the board, both of whom have strong backgrounds in the technology sector, and wish Grahame all the best for his future endeavours.”