Detica announces its intention to acquire Evolution Consulting Group plc
Detica Group plc ("Detica"), the specialist IT consultancy, is pleased to announce that it has agreed terms for the acquisition of the fully-diluted share capital of Evolution Consulting Group plc ("Evolution") for approximately Â£8.5 million in cash. The acquisition is subject to the satisfaction of certain pre-conditions, which relate principally to the re-registration of Evolution as a private company and there having been no material adverse change in the business prior to completion. Completion is expected to take place in January 2006.
Evolution is a privately-owned IT consulting firm with 105 employees specialising in the capital markets sector. Its customer base includes major investment banks and private equity groups. Evolution provides consulting and system integration services with a focus on high-performance, data-intensive systems such as financial trading platforms.
Evolution will be integrated with Detica's existing Financial Services business. The enlarged operation will have the depth of resource and market knowledge to be able to offer a broader range of services to a wider client base across the financial services industry. The management team of Evolution is led by Chief Executive, Steve Mitchell. He will assume responsibility for the management of the enlarged Financial Services business and will report to Detica's UK Managing Director, Colin Evans.
In its audited accounts for the year ended 31 August 2005, Evolution reported revenues of Â£8.8 million, operating profits before exceptional items of Â£0.7 million and profits before tax of Â£0.6 million, and, as at that date, it had gross assets of Â£3.4 million and net assets of Â£1.7 million. The transaction is expected to be earnings-enhancing in the first full financial year post-acquisition.
Evolution is being acquired on a debt and cash free basis and the acquisition consideration is subject to a limited adjustment up or down once Evolution's working capital at completion has been determined. Pending that determination, approximately Â£1.3 million of the consideration will be deferred. The total acquisition cost, including fees and the working capital adjustment, is expected to be approximately Â£9.5 million.
It is intended that the acquisition will be effected by way of a recommended offer to be made by Detica to Evolution's shareholders. Shareholders holding in excess of 90% of Evolution's share capital have already irrevocably committed to accept the offer.
Tom Black, Chief Executive of Detica, commented: "The acquisition of Evolution is an important step for Detica and is consistent with our strategy of building our commercial business through a focus on the Financial Services and Telecoms, Media and Technology sectors. Evolution will further extend our presence in the Financial Services sector and will augment our talent pool by adding a team of senior consultants who have substantial sector experience and contacts. Evolution's blue-chip customers will further expand our client base and I am confident that the combination will enable them to benefit from an enhanced service offering in the future."
Steve Mitchell, Chief Executive of Evolution, said: "From our first meeting with Tom Black and the Detica team, it was clear that we had a shared vision for successfully applying technology innovation within the financial services industry. We can now further accelerate the growth of our combined Financial Services business, and we look forward to taking a complementary set of high-value solutions to clients in capital markets, retail banking and insurance. With similar company cultures, ambitious leadership and a highly-motivated team, I expect the integration with Detica to be a smooth and rewarding process for us all."