GB Group to acquire IDscan Biometrics

Source: GB Group

GBG (AIM: GBG), the identity intelligence specialist, is pleased to announce that it has conditionally agreed to acquire 100% of IDscan Biometrics, a provider of software that automates on-boarding of customers and employees by simplifying the identity verification and data capture process.

IDscan Biometrics helps authentication of documents including passports, visas, ID cards, driving licenses, utility bills and work permits whilst also capturing facial biometrics which provides proof that those documents are not stolen.

The combination represents a highly complementary capability set alongside GBG’s unique global Know Your Customer, Anti-Money Laundering and fraud detection solutions.

The consideration will consist of cash on completion of £37 million, with a further maximum £8 million payable contingent on reaching revenue and EBITDA targets between 12 and 18 months from completion of the Acquisition. The Company intends to finance the acquisition through a non-underwritten share placing to raise up to £25 million and through borrowings under its existing back facilities. The transaction is expected to be earnings accretive in the first 12 months of consolidated GBG ownership.

The Placing is being conducted through an accelerated bookbuild process which will be launched immediately. Peel Hunt LLP is acting as sole bookrunner in connection with the Placing.

It is expected that the final number of Placing Shares will be agreed by Peel Hunt and GBG at the close of the bookbuild and that the number of Placing Shares and the amount that the Company is to raise under the Placing will be announced shortly afterwards. The timing for the close of the bookbuild and the allocation of Placing Shares shall be at the absolute discretion of Peel Hunt. GBG reserves the right to issue and sell a greater or lesser number of shares through the Placing.

Acquisition highlights
 Creates a world leader in proprietary global document validation and biometric and identity verification.
 Provides access to a large global addressable market: spending on credit, fraud, risk and compliance is in excess of US$19 billion a year.
 Enhances GBG’s global KYC, AML and fraud solutions capability.
 Automated identity verification technology is scalable within GBG’s global footprint.
 IDscan Biometrics is highly synergistic with GBG and opens up new cross-selling opportunities.
 The transaction is earnings accretive in the first twelve months of ownership.

Placing highlights
 GBG intends to raise approximately up to £25 million before expenses through a placing by Peel Hunt of 9,090,910 new ordinary shares of the Company of 2.5 pence each at a price of 275 pence per share.
 The Placing is being conducted by way of an accelerated bookbuild on the Company's behalf by Peel Hunt. The bookbuild will open with immediate effect following this Announcement.
 The timing of the closing of the bookbuild, the final size of the Placing, and allocations are at the discretion of the Company and Peel Hunt. A further announcement will be made following closing of the placing book confirming the final size of the Placing.
 The Placing Price represents a discount of approximately 4.5 per cent. to the closing mid-market price of GBG's existing ordinary shares of 288 pence on 28 June 2016, being the last practicable date before this announcement.
 It is expected that, if all 9,090,910 Placing Shares are issued, they will represent approximately 7.3 per cent. of the Company's existing issued share capital.
 The Placing is conditional upon Admission.
 Further details of the Placing are set out in the appendix to this announcement.

Richard Law, GBG’s CEO, commented,
“I am delighted to announce our acquisition of IDscan Biometrics. GBG has followed IDscan Biometrics over the years and we have seen this business grow strongly, winning significant enterprise customers. IDscan Biometrics has a very strong team, has great products and is a great strategic and cultural fit for GBG. I am very pleased to welcome IDscan Biometrics into the GBG family of companies and myself and the Board are confident of continued success for GBG and IDscan Biometrics.”

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