Acquisition of Nudge Digital

This announcement contains inside information

1 July 2021

The Panoply Holdings PLC

("The Panoply", or the "Group")

Acquisition of Nudge Digital

The Panoply Holdings PLC, the technology-enabled services group focused on digital transformation, announces the acquisition of the entire issued and to be issued ordinary share capital of Nudge Digital Limited ("Nudge") (the "Acquisition"), a digital services agency which delivers strategy-led services primarily to the pharmaceutical industry, health sector and, more recently, to local authorities, with a particular focus around care pathways.

Bristol-based Nudge, founded in 2006 by CEO Luke Aikman, provides strategic consultancy and digital execution on mission-critical services, from global pharmaceutical projects to the software underpinning social housing and social care. Since its founding, Nudge has built up a strong client base including major pharmaceutical companies Roche and Galderma, private healthcare provider Bupa as well as the Greater London Authority, Hackney and Westminster councils.

The Acquisition is strategically important to the Group and strengthens its overall position in healthcare and, importantly, provides an entry into the pharmaceutical industry at a time when the NHS is looking at precision medicine, risk stratification and data-driven personalised care plans for patients.

The Acquisition is profitable and immediately earnings enhancing for The Panoply. Nudge has achieved significant revenue growth over the last two years of 151% and delivered revenues of £2.7m, adjusted EBITDA of £1.0m and adjusted profit after tax of £0.9m for the year ended 31 March 2021 (all unaudited). Nudge enters the group with a booked backlog of £2.5m for FY22.

The Panoply is paying a total consideration of £5.0m with £1.75m being satisfied in cash and £3.25m by the issue of new ordinary shares in The Panoply. The cash portion of the consideration will be funded through the Group's own cash reserves. The Group remains highly cash generative, with £4.9m net cash and a net debt position of £8.2m at 30 June, which remains at less than 1x pro forma EBITDA. 

Neal Gandhi, Chief Executive Officer of The Panoply, said:

"We're delighted to welcome Nudge to the Group at a time when the NHS is considering its approach to personalised healthcare and care pathways are coming into sharp focus as the government looks to deliver on its social care reform agenda.

Pulling together Nudge's experience in private healthcare and pharmaceuticals with the Group's existing experience across the NHS and local authority adult social care gives us a strong base to become a leader in the healthcare sector in the UK."

Luke Aikman, Chief Executive Officer of Nudge Digital, said:

"In recent months, Nudge has started to win contracts that are impactful and larger in size than ever before. By joining The Panoply, we can continue on that trajectory in the knowledge that we have a balance sheet that reassures our clients as well as a much larger team to draw upon to fulfill their requirements.

As a team, we're excited to begin working in collaboration with the rest of the Group and to continue delivering exceptional work to our client base."

Additional information on the acquisition

The Panoply has acquired all of the shares in Nudge Digital from Luke Aikman (CEO) and Jason Wilkes (Client Services Director).

The consideration payable under the share purchase agreement relating to the Acquisition (the "SPA") is £5m, subject to a completion accounts adjustment which is expected to result in the payment of approximately an additional £2.2m to Luke Aikman and Jason Wilkes in respect of excess cash in Nudge Digital.  The consideration payable at completion of the Acquisition ("Completion") comprises the following:

(a)        the allotment and issue of 1,190,476 new ordinary shares in The Panoply, with a value of £3.25m, calculated by reference to a price of 273 pence, being the 30 day average mid-market price on the day prior to announcement (the "Consideration Shares"); and

(b)        a payment in cash of £1.75m.

together (the "Consideration").

The Consideration referred to in (b) above is being funded through the Group's existing cash reserves.

274,726 Consideration Shares or Consideration Shares with an aggregate value (based on the share price on the first anniversary of Completion) of £750,000 (whichever is higher) are released from lock-in on the first anniversary of Completion with the remainder of the Consideration Shares subject to lock-in arrangements until the third anniversary of Completion. Customary orderly market provisions apply for 12 months after each of the lock-in undertakings cease to apply.

Following the issue of the Consideration Shares, Luke Aikman and Jason Wilkes will hold 1,071,428 and 119,048 ordinary shares in The Panoply respectively, representing 1.4% in aggregate of the then issued share capital.

Admission and total voting rights

An application has been made for the admission of the Consideration Shares to trading on AIM which is expected to take place on or around 6 July 2021. Following this issue, the Company's issued share capital will comprise 82,571,502 Ordinary Shares and this is the total number of voting rights in the Company. There are no shares held in treasury.

This figure may be used by shareholders as the denominator for the calculation by which they may determine if they are required to notify their interest in, or change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

The person responsible for this announcement is Oliver Rigby, CFO.

Enquiries:

About The Panoply

More information is available at www.thepanoply.com.