GBG to acquire IDscan Biometrics and raise up to $33.8m in share placing
IDscan Biometrics provides software that automates onboarding of customers and employees by simplifying the identity verification and data capture process.
The company helps authentication of documents including passports, visas, ID cards, driving licenses, utility bills and work permits while also capturing facial biometrics.
The agreement terms consist of £37 million cash on completion, with a maximum of an additional £8 million if IDscan Biometrics reaches revenue and EBITDA targets 12 to 18 months from completion of the acquisition.
The acquisition will be funded through a share placing, which aims to raise up to £25 million (US$33.8 million), and through borrowings under its existing back facilities. The placing is forecasted to be earnings accretive in the initial 12 months of the acquisition.
GBG will place over 9 million new ordinary shares of 2.5p (US$0.03) each at a price of 275p (US$3.69) per share, which represents about 7.3% of its existing issued share capital.
The placing was accelerated through a bookbuild process which was launched immediately, with Peel Hunt serving as the placing’s bookrunner.
GBG’s acquisition of IDscan Biometrics will provide access to a large global credit, fraud, risk and compliance market (which $19 billion are spent on each year), improve the company’s fraud solutions capability, and provide new cross-selling opportunities.
IDscan Biometrics’ revenues saw an increase of 138% to £7.6 million (US$10.6 million), delivering a gross profit of £6.1 million (US$8.24 million), an increase of 135% and an adjusted operating profit of £3.2 million (US$4.32 million), for the year ended July 31, 2015.
At the time of the agreement, IDscan Biometrics had £1.6 million (US$2.16 million) in cash and net assets of £1.2 million (US$1.62 million).
“GBG has followed IDscan Biometrics over the years and we have seen this business grow strongly, winning significant enterprise customers,” said GBG CEO Richard Law. “IDscan Biometrics has a very strong team, has great products and is a great strategic and cultural fit for GBG. I am very pleased to welcome IDscan Biometrics into the GBG family of companies and myself and the board are confident of continued success for GBG and IDscan Biometrics.”