AIM-listed supplier of software to the recruitment industry, Dillistone, continues on its acquisition journey with what looks to be a sensible addition. Yesterday, it completed the purchase of FCP Internet Holdings, the holding company of FCP Internet Limited.
FCP Internet is a provider of an entirely SaaS-based solution, called Evolve Software, for facilitating the filling of permanent and temporary vacancies. UK-based, it targets the same market as Dillistone’s Voyager Software. Voyager was a new addition to Dillistone’s portfolio in September 2011 when it acquired Woodcote Software (see Dillistone undertakes a bold voyage for growth). Since then Dillistone’s Voyager division has grown headcount by 20%, launched a new version of its software and signed 100 clients.
In the year ended 31st December 2012, Voyager accounted for c35% of Dillistone’s Group revenues of £7.1m (see Dillistone continues on a profitable voyage). FCP Internet has revenues of £941K, so the acquisition will push Voyager to be almost 50% of Dillistone’s business. However, Voyager has been the least profitable element with margins of 15% compared to 35% for Dillistone’s original executive search business. We are not aware of the operating profit of FCP Internet: but the adjusted PBT margin stood at 18% in the company’s last financial year.
Dillistone has paid £750K in cash up-front and any surplus cash in the business up to £150K will also be paid to the vendors (Dillistone has net assets of £189K at the end of its last financial year). The acquisition is also subject to a deferred consideration of £1.2m subject to FCP achieving certain recurring revenue targets to 31st March 2015.