Disposal of Enables IT

RNS Number : 7736H

1Spatial Plc

15 March 2018

 

15 March 2018

1Spatial plc (AIM: SPA)

("1Spatial" or the "Company")

Disposal of Enables IT

1Spatial, the Global Geospatial Software and Solutions company, announces that it has sold 80.1 per cent. of its holding in Enables IT Group Limited ("Enables") to Champall Consultancy Limited ("Champall"), an entity which is owned and controlled by Michael Walliss (with his wife), the Managing Director and original founder of the Enables business (the "Disposal").  The Board has considered for some time that the Enables business was non-core to the 1Spatial Group's future plans and therefore the Disposal represents a major step forward for the 1Spatial Group in allowing the Board and management team to focus on the core Global Geospatial business which has significant potential for growth.    

Enables, which was acquired by 1Spatial in July 2015, provides IT managed services to a portfolio of companies.  In the audited annual report for the year ended 31 January 2017, Enables generated £6.9m of revenue, £1.4m of gross profit and £0.5m of adjusted EBITDA and was classified as the 1Spatial Group's Cloud division.

Enables provides services mainly to the SME market, with one major customer accounting for a large proportion of the division's revenues during the 1Spatial Group's 2017 and 2018 financial years. This major customer has decided to insource the services currently provided by Enables. While there are opportunities for contract extensions with existing clients, the Board considers the visibility of revenues from the division to now be higher risk and expects that without substantial new contract wins to replace lost revenues, the Enables division will potentially become cash consuming and loss-making during the year ending 31 January 2019.  

The Company has agreed nominal consideration of £1 in respect of the Disposal and to contribute £150,000 (£100,000 payable on completion and £50,000 payable by the end of May 2018) to Enables' near term working capital requirements. To further assist Enables' working capital requirements the Company has agreed to make an interest free £85,000 loan (a £45,000 drawdown to occur on 30 August 2018 and a £40,000 drawdown to occur on 28 September 2018) which is repayable by Enables in 10 equal monthly payments with the first repayment due on the last day of September 2019 and the final repayment date to be 30 June 2020. Under the terms of the share purchase agreement in respect of the Disposal (the "SPA"), Champall has the option (the "Option") to acquire 1Spatial's remaining 19.9 per cent. holding in Enables for consideration of £100,000, to expire on the second anniversary date of completion of the Disposal. In addition, under the terms of the SPA, the Company has a contingent consideration right in the event the Enables business is sold within 12 months of completion. 

Furthermore, in connection with the Disposal, a variation to the stock purchase agreement dated 3 March 2017 relating to the sale of Enables IT, Inc. to its US operational management has been agreed, pursuant to which any further consideration to be paid to Enables shall now be paid directly to the Company.

The Disposal constitutes a related party transaction for the purpose of AIM Rule 13. The Directors consider, having consulted with the Company's nominated adviser, N+1 Singer, that the terms of the transaction are fair and reasonable insofar as the shareholders are concerned.

Claire Milverton, CEO of 1Spatial commented:

"This Disposal represents an important step forward for the 1Spatial Group allowing the Board and management team to focus on the core Global Geospatial business which has a high potential for growth and where we have technology based solutions to address this exciting opportunity. 

I would like to take this opportunity to wish Mike and his team future success as they embark on the next step of Enables' development. "

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For further information, please contact:

1Spatial plc                                                                                         01223 420 414

Andrew Roberts / Claire Milverton

FTI Consulting                                                                                     020 3727 1000

Dwight Burden / Alex Le May

N+1 Singer                                                                                          020 7496 3000

Shaun Dobson / Lauren Kettle

LEI Code: 213800VG7OZYQES6PN67

About 1Spatial

1Spatial is a software solutions provider and global leader in managing geospatial data. We work with our clients to deliver real value by making data current, complete and consistent through the use of automated processes - ensuring that decisions are always based on the highest quality information available.

Our unique, rules-based approach delivers enterprise-scale, cross-platform automation to all stages of the data lifecycle. It builds confidence in the data while reducing the time and cost of stewardship.

Our global clients include national mapping and land management agencies, utilities, transportation organisations, government departments, emergency services, defence, and census bureaus.

A leader in our field, we have a wealth of experience and a record of continual innovation and development. We partner with some of the leading technology vendors including, Esri and Oracle.

For more information visit www.1spatial.com 

 

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