GB Group powers up with £11.2m swoop

GB Group, the Chester-based ID management systems provider, is to buy one of its major rivals in a £11.2m deal.

The AIM-listed company will raise around £8m through a placing of 20 million new shares at 40p per share to buy Capscan Parent, a London and Manchester-based address management business.

The placing comprises of a vendor placing of 15,750,000 ordinary shares at 2.5p per share. GB Group will also raise a further £1.7m through the placing of 4,250,000 ordinary shares.

Capscan, which employs 54 people across its two sites, had sales of £6.8m in the year to the end of March. Adjusted ebitda was £1.2m, while net assets were £3.9m.
 
GB Group chief executive Richard Law said: “Capscan is an excellent business and this acquisition brings together the number 2 and number 3 operators in this important and growing market of customer registration.

“Our acquisition of Capscan significantly advances GB’s strategy of leading the rapidly developing market for identity management. Being able to identify individuals reliably and then to register them efficiently and accurately is, we believe, a fundamental enabler of online business and one that will show significant growth as consumer spending continues its move online.”

Mr Law said the board expects the Capscan deal to help GB make higher operating margins as a result of increased scale, efficiency and competitive differentiation.

GB also announced its results for the six months to the end of September, which showed a 7% increase in revenues to £12.4m, and pre-exceptional profits rising 36% to £1m.

Law firm Squire Sanders Hammonds advised GB Group on the deal, the company’s second acquisition this year.

The team was led by corporate partner Andrew Millar assisted by associate Stephen Mooney and trainee David Molyneux. Associate Jenna Ridley provided the tax advice whilst the commercial advice was provided by senior associate Emma Ball.

Richard Harding and Stuart Thwaites from Ernst & Young’s transaction services team in Manchester, also advised GB Group.