More M&A activity & consolidation in UK legal IT market
Here is the full text of a statement just issued by Ultima – which came in 5 minutes ago and too late to include in this week's Insider newsletter…
The Directors of Ultima (the 'Directors’) are pleased to announce the completion of the acquisition of JCS by Cognito Software Limited (‘Cognito’), a subsidiary of Ultima, today (23 September 2008) which is a substantial acquisition as defined in the AIM Rules. The operations of the two entities will be merged and will trade under the brand of Cognito, Ultima’s legal software brand.
The cost of the acquisition was £268,664 and in JCS’s last unaudited accounts for the year ended 30 June 2008 the turnover was £284,636; generating profit before tax of £65,210. JCS’s unaudited net assets were £108,664 as at 30 June 2008.
The enlarged Cognito will now have a client base of nearly 300 and will continue to provide software and services to the legal profession, along with marketing a comprehensive range of multi-user software for solicitors. The first Cognito product was originally developed in 1991 and the software has evolved to meet the expanding needs of an industry that is increasingly automating repetitive work.
Founders Roger Jackson and Kerry Frater, who successfully built JCS into the longest standing member in the Law Society’s Software Solutions Guide, have been appointed Managing Director and Chief Technical Officer respectively of the combined company. Their experience and expertise will help formulate and drive the strategy for all Cognito products and services in the months and years to come. Cognito is now well placed to continue to achieve its key objectives of product development and increasing market presence.
With the goal being to develop new versions of both companies’ software, the merger creates a substantially larger development team. This will allow for more aggressive and ambitious targets by combining the skills and expertise that both companies have built up over 17 years in the legal software market. The result will be a quicker and more functional software suite, well placed to take existing and new clients into the emerging requirements of legal IT.
JCS also brings a number of innovations to the Cognito range. It already has in place the mechanisms and functionality for on-line identity checking, text messaging, stamp duty land tax submissions, integrated scanning, pdf document construction and merging, and is in the process of integrating a professional will production module. JCS also provides the option for complete turnkey solutions, supplying all hardware, software, support & services – giving clients the attractive option of a 'one-stop shop' for all of their IT needs.
Humayun Mughal, Chairman & CEO of Ultima, commented: “We believe that this represents a fantastic opportunity to exploit the considerable synergies that exist between the two companies. This will allow us to more effectively achieve our two principal objectives which are of critical importance to our customers: market leading software, from a secure and innovative supplier.
“The merger will result in a greater development team that I believe will enhance product innovation and development, along with a support & training team large enough to make the implementation more effective, and therefore the take up and return on investment of new software modules faster. Fundamentally I am confident that this acquisition will provide us with a larger client base and will be earnings enhancing for the Company.”
Roger Jackson, Managing Director of Cognito Software Limited, commented: “This merger offers great potential for synergy between our two companies, as Cognito and JCS have their respective market strengths. Both organisations have abilities that will complement the other’s offerings and will in turn result in an enhanced merged company. The merger will make the new Cognito one of the leading suppliers of practice and case management software in the country, providing ongoing security for all our clients. The new Cognito will result in a structure that will work with and listen to the needs of its clients in order to create solutions that really make a difference.”
• Ultima operates through two divisions: the Services Division and the Products Division. The Company’s Services Division is primarily responsible for supplying computer application software, related support and other services to the legal profession principally through the Cognito brand. The Products Division is responsible for the development and sale of consumer and specialist electrical goods, with a focus on renewable and low energy products.