LoopUp Group PLC raises £ 8.9million to buy digital learning company and step up investment in cloud telephony
âHybrid work is expected to become mainstream in the post-pandemic workplace, and the group believes that opportunities for SyncRTC’s technology will multiply in the post-pandemic digital workplace,â LoopUp said.
() announced plans to buy SyncRTC Inc, a software technology company as a hybrid collaboration service, and has raised Â£ 8.85million to increase investment in cloud telephony and pay down debt.
SyncRTC, a distance education and corporate training specialist, was purchased for an enterprise value of US $ 4.5 million (Â£ 3.26 million) in cash and stock.
LoopUp will pay Â£ 2million of the consideration by issuing 5.374million shares upon completion and pay Â£ 0.25million in cash, along with the assumption of the Â£ 1million cash debt of SyncRTC, Â£ 0.3million which it plans to wipe out after the acquisition.
LoopUp and its brokers, Cenkos and Panmure Gordon, also completed an institutional placement and retail offering at a price of 25p per share overnight, a 31.5% discount from the September 28 closing price.
The AIM-listed company said the acquisition is expected to close on or around October 1, 2021 and is not conditional on capital raising or shareholder approval of the capital raising.
With gross cash of Â£ 6million already in the bank, once fundraising is complete LoopUp plans to use around Â£ 0.55million of cash for the acquisition, Â£ 3.5million for reduce debt, Â£ 3.5million for working capital and Â£ 3.25million to increase investments in its cloud telephony business.
The investment in cloud telephony follows what the company said was a strong commercial traction and early success since launching a product integrated with Microsoft Teams, which saw 15 new direct customers with total contract value. of Â£ 1.7million earned in the first half of the year, and a strong sales pipeline has been built.
Believing that the company has a solution differentiated from the competition from operators in the fastest growing segment of what is already a large cloud telephony market, the acquisition of SyncRTC, headquartered in United States, aims to extend its offer to companies in the “hybrid labor” market.
LoopUp said it has a long-standing relationship with SyncRTC founder and CEO Victor Sanchez, who will become the group’s chief technology officer (CTO) after the acquisition.
At SyncRTC, Sanchez and his team of 24 people designed their ‘mashme.io’ platform and associated ‘Room of the Future’ solutions to create what LoopUp admins consider to be ‘a top notch experience for larger-scale hybrid education and in-company training. implemented “.
With a client base of around 30 business education and training clients, including Said Business School at the University of Oxford, NYU Stern School of Business, Colorado State University and Grupo Santander, SyncRTC said 2020 revenue of US $ 2.1m and a loss of $ 0.5m compared to Â£ 1.52m and Â£ 0.4m the year before.
LoopUp said it expects a significant proportion of SyncRTC’s cost base to be eligible for R&D tax credits, and on that basis, SyncRTC would be a positive cash flow for the group.
“Hybrid work is expected to become mainstream in the post-pandemic workplace, and the group believes that opportunities for SyncRTC’s technology will multiply in the post-pandemic digital workplace,” the company said.
âSyncRTC brings significant differentiation to LoopUp’s strategic collaboration and event rings by taking both hybrid and purely virtual implementations. “
A total of 30,230,752 shares were placed by Cenkos and Panmure Gordon, and investors recruited by subscribed a total of 5,169,248 additional shares, all at issue price.