Ideagen acquires Harmony UK in £28.1m deal

The AIM-traded firm described Huddle as a software-as-a-service (SaaS) secure content collaboration and workflow product, with customers across regulated sectors such as accountancy and governments.

It said it was used by around 380 customers including the Federal Aviation Administration, Baker Tilly, the National Audit Office, EDF Energy, the UK Department of Defence, the Home Office, and multiple NHS Trusts.

Ideagen said Harmony was profitable and cash generative, and was expected to be earnings enhancing for Ideagen in the current financial year.

The board said the acquisition would provide the company with a “strong” organic growth opportunity as part of its document collaboration and compliance product suite, adding that Harmony's current annualised run rate revenues were about £10.5m, of which more than 99% was recurring.

It expected Harmony to add around £3.5m of EBITDA to the group in its first full financial year of ownership, being the year ending 30 April 2022, after integration and rationalisation of its run-rate annual cost base of approximately £8m.

Gross consideration of £28.1m would be payable in cash on completion, funded by Ideagen’s existing resources and the proceeds of its recent placing.

“We are delighted to announce the acquisition of Huddle,” said executive chairman David Hornsby.

“It has a resilient business model, a quality customer base, outstanding technology and a strong team.

“Huddle will be an important product for Ideagen as we integrate the software with PleaseReview to deliver a broader and deeper document collaboration and compliance proposition to our customer base and accelerate annualised recurring revenue growth.”

At 1326 GMT, shares in Ideagen were up 3.43% at 241.5p.