Listed group swoops for certification and quality management provider in £17.4m deal
A Wiltshire-based certification and quality management provider has been acquired by a listed group in a £17.4m deal.
Marlowe, a provider of business-critical services and software which assure regulatory compliance, has bought IMSM Holdings Limited and International Management Systems Marketing Limited.
Established in 2004, IMSM provides ISO auditing and certification services to approximately 5,000 UK and international clients.
This acquisition is a key step in Marlowe’s strategy to broaden its GRC capabilities into the ISO certification market and presents an attractive opportunity to cross-sell into the group’s existing customer base. Additionally, there are opportunities to digitalise IMSM’s services via collaboration with Marlowe’s SaaS offering.
IMSM audits the quality of clients’ business processes and internal systems on a recurring basis to ensure compliance with ISO standards in areas such as safety management, information security and environmental management. IMSM provides these services to both SMEs and larger clients on a mix of annual and multi-year contracts, and shares a similar client base to Marlowe’s GRC division.
In the year to 31 December 2022, IMSM generated revenues of £12.2m and EBITDA of £1.9m. As at 31 July 2022, IMSM had net assets of £6.7m. The total enterprise value will comprise upfront cash consideration of £12.9m and a further £3m payment through the issue of 597,609 ordinary shares of 50 pence each in addition to an estimated £1.5m in performance-related contingent consideration payable after the first year of ownership.
Alex Dacre, chief executive of Marlowe, said: “The acquisition of IMSM broadens the capabilities of our Governance Risk and Compliance division into the attractive and highly complementary ISO auditing and certification market. This is a large and fragmented market, and the addition of IMSM will enable us to address a core component of our clients’ compliance requirements. This acquisition is consistent with our strategy to selectively execute on bolt-on acquisitions whilst maintaining leverage in the region of 2x EBITDA, within the Board’s guided range.”
