Aptitude Software acquires Subscription Management provider, MPP Global for £37.1mn
LONDON, UK: Aptitude Software Group, the specialist provider of finance transformation and automation software, has acquired MPP Global Solutions Limited, an international provider of cloud-based subscription management and billing technology (Subscription Management) for a total enterprise value of £37.1 million.
MPP Global’s Subscription Management platform, focused on the subscription economy, offers a modular, cloud-based, end-to-end SaaS solution to large enterprise customers, enabling identity management, CRM, automated billing, and payment processing. MPP Global’s customers are largely located in the European and North American media and publishing sector alongside a growing number of other verticals.
MPP Global has significantly broadened the applicability of its Subscription Management platform to take advantage of these growing verticals. Subscription Management’s ability to manage both physical and digital subscriptions means it is well positioned to expand Aptitude Software’s revenue management offering into an end-to-end subscription, billing, and revenue automation solution and is expected to provide further opportunities for automation and growth to Aptitude Software’s existing customer base.
MPP Global’s Annual Recurring Revenue (‘ARR’) at 30 June 2021 was £8.0 million across approximately 40 clients. MPP Global’s revenue for the year ended 30 June 2021 was £10.4 million with a profit before tax for the year ended 30 June 2021 of £0.1 million. MPP Global’s gross assets as at 30 June 2021 were £5.1 million, principally made up of cash and trade receivables.
The Acquisition reflects Aptitude Software’s stated strategy of acquiring businesses that accelerate the Group’s product strategy, expand on its capabilities to automate complex finance functions, and support its continued global growth across a broad range of sectors.
The Acquisition is also supported by positive global market tailwinds as dynamics continue to shift towards a subscription-based economy, observed by Aptitude Software through its Aptitude Revenue Management client base in medical technology, advanced manufacturing, and other sectors. The Acquisition will enable the Group to provide full, end-to-end solutions which automate the revenue lifecycle of the subscription economy, from subscriber acquisition and billing through to Aptitude Software’s existing revenue management and recognition capabilities.
The Acquisition will strengthen Aptitude Software’s presence in global technology, media, and telecom verticals where businesses are increasingly adopting subscription models. Aptitude Software and MPP Global together support robust product functionality with deep expertise across multiple industries, and we envision continued adoption across these verticals for the Group’s wider product suite.
MPP Global has a high proportion of recurring revenue, increasing Aptitude Software’s overall recurring revenue proportion to 62% on a pro forma basis1. Following the Acquisition, the combined group will be providing revenue automation-focused solutions to over 75 organisations, representing approximately 46% of the Group’s Annual Recurring Revenue. It is anticipated there will be a number of cross sell opportunities within this combined client base with MPP Global’s Subscription Management clients also potential users of the Group’s finance transformation products, including the Revenue Management solution & Aptitude Accounting Hub. Aptitude Software’s clients are potential users of Subscription Management as subscription-based business models continue to gain traction in the Group’s target industries.
Given the direct adjacency and advanced technical design of the products, we envision the integration of Aptitude Software and MPP Global to be completed in H2 2022, paving the way for new and sustained growth of a best-in-breed solution for end-to-end revenue automation.
MPP Global brings c. 100 new employees to the Group, most based in northern England. The business’s North West headquarters is set to become a second long-term innovation centre for the Group, with c. 60 team members in the MPP Global Software and Technology teams.
Consideration for the entire issued and to be issued share capital of MPP Global is £38.7 million, which includes £1.6 million of net cash in MPP Global. Of the Consideration, £35.4 million is payable in cash at completion and will be satisfied using Aptitude Software’s existing cash resources.
The balance of the Consideration will be satisfied by the issue of 492,537 new ordinary shares at an issue price of 670 pence each, being the average mid-market closing price for an ordinary Aptitude Software share for the 5 business days preceding 8 October 2021. These New Ordinary Shares will be subject to a twelve-month lock-in. It is expected that a loan facility will shortly be agreed which will provide the Group with the capability for further well-targeted acquisitions in the future.
The majority shareholders of MPP Global include Grafton Capital and AlbionVC, alongside founders Paul Johnson and Chris Cheney and their families. The Founders will support the initial integration of MPP Global into the Group before exiting the business.
Jeremy Suddards, Chief Executive Officer of Aptitude Software, said: “I am delighted to welcome the MPP Global team and customers into the Group, expanding both our current offering and future innovation capabilities. We believe MPP Global is a strong strategic fit, with both businesses positioned to capitalise on the growth in Subscription offerings, and we are excited for the new opportunities the acquisition will bring.”
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8 Oct, 4:35 pm GMT+1 ·Disclaimer