Ovum plc (“the Group”) - Acquisition and Trading Update
September 12 2006 - Ovum plc (OVM.L), a leading provider of research, advisory and consulting services in the global Information, Communication and Technology (ICT) sector, is pleased to announce the acquisition of “Orbys Consulting Ltd”, a specialist advisory firm in outsourcing. In addition, the company confirms that its existing business is performing strongly and, when coupled with the contribution from Orbys, we expect upside to the business this year and significant upside going forward.
Orbys Consulting
Orbys is the second acquisition made by Ovum in the six months since its IPO in March 2006. It is in line with the Group’s stated growth strategy to expand the business through the acquisition of specialist, high quality businesses as well as through organic growth.
Established in 1993 and headquartered in the UK, Orbys is a profitable business which generated turnover of £3.9m, of which £0.18m was profit before tax, for the year ended 31 December 2005. There are no extraordinary items and the net assets of the business are £0.24m. It has an impressive client base of blue-chip, multinational companies including Boots, Deutsche Bank, Metropolitan Police Service, Northern Foods, Sainsbury’s, Syngenta, and Thorntons. It advises these organisations about their sourcing strategy and helps them with supplier evaluation and selection, contract negotiation and supplier management.
The acquisition of Orbys is an important strategic move for Ovum and signals an acceleration of Ovum’s move into the advisory market for large user organisations. Orbys’s expertise at the most complex level of sourcing, combined with Ovum’s in-depth understanding of the suppliers, establishes a unique base for providing user organisations with pragmatic and relevant advice about their sourcing strategy, supplier selection and contract negotiation and management. Ovum intends to invest in this area, bringing to bear its expertise in both IT Services and Telecoms, and it will look to acquire other specialist companies to strengthen this area further.
The acquisition is for a maximum consideration of £3.64m (a maximum of £3.26m in cash with the remainder in shares), of which £1.5m, including all of the share element, is subject to certain revenue targets being achieved by August 2007. The acquisition is expected to be earnings enhancing in the current and next financial year once the integration of the business has been completed.
Trading Update
The business has performed strongly this year as indicated in the AGM statement. Ovum is experiencing high levels of activity from existing clients and increased inquiry levels from new customers. This, coupled with the contribution from the acquisition of Orbys, gives us confidence to expect upside to the business for the current year and significant upside going forward.
Chris Dines, CEO of Ovum, said:
“Trading has been strong for us since our IPO in March and we continue to see a lot of opportunities to grow our business.
“I am delighted to be announcing our second acquisition in the past six months. Orbys is a European leader in outsourcing with a reputation for pragmatic advice and a first class client list. This acquisition provides excellent synergies and sets us on the path of establishing Ovum as a key advisor at the critical juncture between vendors and buyers.
“The outsourcing market is set for further growth and its counter-cyclical nature means it is an excellent acquisition for the Group. Our immediate focus will be to expand the sales of Orbys internationally but ultimately we will seek to develop a range of unique services for our blue-chip clients. We look forward to working with our new colleagues in developing the opportunities that can be gained through the combination of our businesses.”
Angela Wyatt, Managing Director of Orbys, said:
“We are delighted to be joining forces with Ovum. In an increasingly global sourcing market, Ovum’s geographic reach and commitment to expanding sourcing advisory services internationally, will significantly strengthen our ability to service existing and new Orbys clients across the world. In addition, access to Ovum’s excellent research capability, widens the scope of services that we can offer to our clients. This is an exciting opportunity and the Orbys team look forward to working together with the Ovum team, to continue the international development of our strategic sourcing advisory business.”
Enquiries:
Ovum |
020 7551 9282 |
Orbys Consulting |
020 7872 5525 |
Hogarth Partnership |
020 7357 9477 |
About Orbys Consulting
Orbys is a European leader in strategic sourcing advisory services that continues to help UK and international organisations to achieve their sourcing objectives and obtain the best value from external sourcing arrangements. The company boasts extensive experience of both Information Technology and Business Process sourcing arrangements. Orbys helps clients to get the right sourcing solution for competitive advantage and risk avoidance and then ensure that it delivers the maximum possible value.
About Ovum
Ovum’s primary activity is providing value-added advisory services and consulting to retained and project clients. The Company acts as a well respected and trusted source of industry data, knowledge and expertise on the commercial impact of technology, regulatory and market changes. Ovum engages in continuous research and industry analysis to determine market dynamics in its specialist sectors.
Ovum has developed long-standing relationships with many of its corporate clients, which include major international blue-chip companies such as: Alcatel, AT&T, BT, Cable & Wireless, Cisco Systems, Deutsche Telecom, Fujitsu, HP, IBM, Microsoft, Telstra and Vodafone.
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