Panoply Holdings has acquired Newcastle-upon-Tyne-based Difrent from Rachel Murphy and Steven Dhillon for a total initial GBP 8.80 million, which may increase to GBP 13.30 million if financial targets are met.
In the first instance, the technology-enabled company focused on digital transformation is paying GBP 0.40 million in cash and GBP 4.80 million in 3.92 million new shares issued at a price of GBP 1.23 apiece.
Further instalments are based on revenue generated for the 12 months to 31st March 2021 and the subsequent financial year to 31st March 2022.
Any additional payment will be calculated at 0.66x growth above Difrent’s revenue for FY 2020 in each period.
There will also be a claw back of shares if turnover declines below GBP 7.00 million in FY 2021 and GBP 7.60 million in FY 2022.
Following the acquisition, Panoply expects to remain in a strong position, with cash at the end of August – less the consideration payment – of GBP 4.00 million and net debt of GBP 3.00 million.
Difrent is a digital transformation consultancy serving the healthcare sector by providing strategic advice, user centred design, business analysis and change, procurement, and front and back end development services.
The company also specialises in remote-first delivery, enabling organisations to deliver positive outcomes entirely at a distance.
“Given the current evolution of working practices, the board believe that this is a highly relevant and valuable offering”, Panoply noted in its statement.
Difrent generates about three quarters of annual revenue from the health and social care sectors.
Clients include the likes of NHSX, NHS Business Services Authority, Public Health England, World Health Organisation, and the department of work and pensions.
The company generated total unaudited revenue of GBP 7.40 million in the 12 months ended 31st March 2020 (FY 2019: GBP 4.30 million).
It booked unaudited earnings before interest, tax, depreciation and amortisation (EBITDA) of GBP 0.90 million (FY 2019: GBP 0.20 million) and net profit of GBP 0.70 million for the full year.
Difrent’s consulting division accounted revenue of GBP 5.70 million in FY 2020 (FY 2019: GBP 3.20 million) and EBITDA of GBP 0.70 million (FY 2019: GBP 0.10 million).
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