Wetherby's Proactis acquires e-procurement firm for £15.5m

Proactis Holdings, the Wetherby-based specialist spend control software provider, has formally agreed to acquire Millstream Associates Ltd for £15.5m.

Friday, 18th November 2016, 1:27 pm
Updated Monday, 21st November 2016, 12:23 pm
Wetherby-based software firm Proactis employs around 140 employees.

Aberdeen-based Millstream provides e-procurement services to more than 4,000 customers, mainly in the public sector, as well as offering tailored tender notification information to suppliers looking for new business opportunities. It has a track record of conservative revenue growth.

The acquisition is to be funded by the combination of a placing of up to 9,259,260 new ordinary shares of 10 pence each in Proactis at a placing price of 135 pence, to raise up to around £12.5m, plus a revolving credit facility of £6m.

Proactis CEO Rod Jones said: “The acquisition of Mill-
stream represents a significant step in our growth strategy, substantially increasing the scale of the Group.

“The acquisition broadens both the product offering and the customer base on the buy side of the procurement process whilst also bringing scale of operation on the strategically important supply side of the procurement process.

“Millstream is a clear comp-lementary fit to the group and 
provides some potential up-
side with cross-selling opportunities into both the Proactis 
and Millstream customer bases.”

Proactis, which employs around 140 people at its Wetherby offices, was advised by a multi-disciplinary team of specialist lawyers at Leeds-based Walker Morris.

Richard Naish, partner at Walker Morris, said: “Walker Morris has been delighted to support Proactis on its acquisition of Millstream which represents an excellent fit with the Proactis portfolio.

“As a long-standing client of the firm we hope that this latest acquisition will provide Proactis with a solid platform for future growth.”

Last month, Proactis announced a strong set of results, with revenues up by 13 per cent to £19.4m. Underlying organic growth of 7 per cent has been augmented by M&A activity; its acquisition of Due North in February was its fourth within two years.

Following the announcement of the deal, analysts at broker Finncap set a ‘Corporate’ rating on shares in Proactis, which is listed on the AIM market, with a price target of 235 pence, potentially heralding an increase of over 60 per cent in Proactis’s share price. The share closed at 145.51 pence on Tuesday.