Interesting news today that IDOX has acquired Caps Solutions - in fact, a reverse takeover (the CEO of Caps takes over as CEO at IDOX).
Caps always had a huge position in local council planning software, concentrating on geographical information systems - identifying and mapping where things are. IDOX was the new kid on the block, focusing on document and records management rather than 'planning', and started moving into other council services areas too.
So putting the two together could make good sense - though the documentation says nothing any any potential software integration, which I would have thought was the ultimate game plan. Perhaps the two companies need to wait till their CTOs have argued out the issues there... Meanwhile, it gives the joint enterprise a clear lead in functionality and market share over its competitors.
The price doesn't look too high either - 70% of turnover, and 12x earnings (about 8x EBIT, though no EBITDA figure is given) - below the software sector as a whole. Though I notice that despite a 7% increase in revenues last year, Caps turned in a lower profit - if that can be turned round, the acquisition would be a fair bit cheaper.
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