Acquisition of Enterprise Software Systems (ESS)

30 November 2023

Microlise Group plc

("Microlise", "the Group" or "the Company")

Acquisition of Enterprise Software Systems (ESS)

Microlise Group plc (AIM: SAAS), a leading provider of SaaS based transport technology solutions to fleet operators, is pleased to announce that it has reached an agreement to acquire Enterprise Software Systems (ESS), a leading provider of transportation management system ("TMS") solutions.

Founded in 1997 in the UK, ESS has a proven track record as a leading provider of TMS solutions to enterprise clients such as Culina Group and GXO, helping customers manage their transport operations from order receipt to invoice creation. ESS is majority founder-owned, has 42 full-time employees and delivered revenues of approximately £5.1m and an adjusted EBITDA of £1m during the 12 months to 31 August 2023, with net assets of £2.6m. Approximately 75% of revenue is recurring based on long-term contracts with the balance made up of non-recurring set up fees.

Following the Group's Acquisition of Vita Software earlier this year, a leading provider of TMS solutions to smaller and pallet/parcel network customers, the acquisition of ESS strengthens Microlise's TMS offering and introduces a market-leading TMS solution for medium and large fleet customers into the Group's transport technology product offering.

Under the terms of the acquisition, Microlise will pay an initial £7.65m cash payment due on completion and a maximum deferred contingent consideration of £0.85m, payable in cash after 6 months from completion and dependent on any claims. The vendors will also receive a further £3m from existing ESS cash reserves on completion so that the Company acquires the business on an effective cash and debt free basis. The acquisition is expected to immediately enhance earnings on completion.

The Acquisition remains conditional upon no objections being raised by the UK Competition and Markets Authority ("CMA"). The Board of Microlise expects this process to conclude, and the Acquisition to complete, within 3 months of today's date.  Further announcements will be made as appropriate.

Commenting on the acquisition, CEO Nadeem Raza said: "We are delighted to announce ESS as our second acquisition of the year, and our largest to date. The acquisition showcases our commitment to strengthening our TMS offering, which we will now be able to provide to businesses of all sizes. ESS immediately increases our recurring revenues, enhances our earnings, and will provide numerous upsell and cross-sell opportunities. We look forward to updating the market on progress in this respect and on the integration of ESS into the wider Group."

For further information, please contact:

Microlise Group plc

Nadeem Raza, CEO

Nick Wightman, CFO                                                                       C/O SEC Newgate

Singer Capital Markets (Nominated Adviser & Broker)

Steve Pearce / James Moat / Harry Gooden                        Tel: 020 7496 3000

SEC Newgate (Financial PR)

Bob Huxford / Molly Gretton / Harry Handyside                                Tel: 020 3757 6880

Email: [email protected]

About Microlise

Microlise Group Plc is a leading provider of transport management software to fleet operators helping them to improve efficiency, safety, and reduce emissions. These improvements are delivered through reduced fuel use, reduced mileage travelled, improved driver performance, fewer accidents, elimination of paperwork and delivery of an enhanced customer experience.

Established in 1982, Microlise is an award-winning business with over 400 enterprise clients. With 463 employees based at the Group's headquarters in Nottingham in the UK, the Company also has offices in France, Australia, and India, with a total global staff base of over 670.  

Microlise is listed on the AIM market of the London Stock Exchange (AIM: SAAS) and qualifies for the London Stock Exchange's Green Economy Mark.