Acquisitions ahoy – Tikit buy TFB for £7.4 million
This morning Tikit Group Plc announced the acquisition of TFB Group Limited, a provider of practice management solutions to law firms, from TFB's management and funds managed by NVM Private Equity. TFB, which developed the Partner for Windows Software suite (P4W), is the leading independent supplier of integrated IT solutions for case and practice management to medium and small UK law firms. Its revenues are derived primarily from licence sales of the Partner for Windows software and annual support contracts with approximately 500 clients who use this software. The business has offices in Fareham and has 58 employees.
In the year ended 30 September 2007, TFB achieved total revenues of £4.9 million, of which £2.8 million (approximately 57%) was from recurring support contracts, achieving an operating profit before tax of £1.0 million. Audited net profit before tax was £253,000. The profit before tax is after deducting goodwill amortisation and interest payments on loan stock neither of which will continue post acquisition. The gross assets of TFB at 30 September 2007 were £2.5 million.
The consideration of £7.4 million is to be satisfied by £4.1 million in cash and 1,441,518 Tikit ordinary shares, at 229 pence per ordinary share, to be issued on completion. In addition, TFB had £1.1 million of net debt which will be repaid at completion. The new ordinary shares issued pursuant to the acquisition of TFB will rank pari passu with the existing ordinary shares of Tikit Group, save for the final dividend of Tikit for year ended 2007 which has already been declared. Trading is expected to commence on 10 April 2008. Following admission of these shares, the Group will have 14,245,361 ordinary shares in issue with each ordinary share holding one voting right.
Simon Hill, TFB MD, said 'We believe that we have real momentum in the market place and offer clients a clear strategy when reviewing their PMS options. As a member of the Tikit Group of companies, we will be in a better position to exploit new opportunities as well as providing our existing clients with an enhanced range of services and applications.'
David Lumsden, Tikit Group CEO, commented 'I am delighted that Simon and his team have decided to join Tikit Group and I look forward to enabling TFB's client base to have access to Tikit's best of breed applications to further support their IT strategies.' Mike McGoun, Tikit Group Chairman, commented “This is an exciting development for Tikit, as we continue our strategy of increasing market share in the legal sector and also increasing the predictable recurring revenues of the Group.”
And here is a subsequent release just issued by TFB…
TFB are delighted to be able to announce that they have become part of Tikit Group PLC to create the largest Independent supplier of quality IT solutions and services to the legal profession in the UK, with clients ranging from regional firms to the magic circle. An important part of the acquisition, which is for cash and shares, will see TFB continue to trade as an independent company with Simon Hill (Managing Director) and Mark Garnish (Business Development Director) remaining on the TFB Group Board in the same roles as before. Both have signed long term contracts to remain with the company and have become significant shareholders in Tikit Group PLC.
Simon Hill commented “We have always enjoyed a very good relationship with Tikit and whilst we serve the same profession we have very few shared clients. As a result of this deal the Tikit Group will be able to offer solutions to all law firms in the UK and beyond, irrespective of size. Like Tikit, TFB has always valued our independence and I am delighted that TFB will remain as an independent organisation inside one of the largest and most significant suppliers to professional organisations.”
Mark Garnish added “We are particularly excited about the opportunities for knowledge and product sharing between the two companies in the Group. Tikit’s expertise in the largest firms in the UK is second to none and we are looking forward to gaining a greater understanding of these areas of our market which can only have a positive impact for our clients with the challenges the profession will face over the coming years.”