Acquisition of Syntec Holdings Limited and Launch of ABB

News & Insights

15 Dec 2021

Proposed Acquisition of Syntec for a total consideration of £31 million.

Eckoh plc

("Eckoh, or the "Company, or the "Group")

Acquisition of Syntec Holdings Limited and Launch of ABB

Proposed Acquisition of Syntec for a total consideration of £31.0m
Proposed Placing to raise up to approximately £13.7m via accelerated bookbuild (ABB)
Supports Eckoh's strategy to be the market leader in Customer Engagement Payment Security

Eckoh, the global provider of secure payment products and customer contact solutions, announces it has today entered into an agreement to acquire the entire issued share capital of Syntec Holdings Limited ("Syntec"), a provider of Secure Payments solutions, for a total consideration of £31.0m through a combination of cash and new Eckoh shares (the "Acquisition").

The cash consideration payable under the Acquisition is £24.7m ("Cash Consideration") with the balance of £6.3m payable in new Eckoh shares ("Consideration Shares"). £8.0m of the Cash Consideration is from Eckoh's existing cash resources with the balance to be funded by a placing and a new debt facility (further details of which can be found below).

To partially fund the Cash Consideration, the Company today announces a proposed non-pre-emptive placing of up to 25,377,600 new Ordinary Shares (the "Placing Shares") at a price of 54 pence per Placing Share (the "Placing Price") to raise up to approximately £13.7m before expenses (the "Placing"), fully utilizing existing authorities to allot shares on a non-pre-emptive basis. The Placing Shares represent up to approximately 9.96 percent of the Company's ordinary shares in issue carrying voting rights.

Highlights of the Proposed Acquisition

  • Consolidates market-leading position in Customer Engagement Data and Payment Security - enhances Eckoh's position as the largest provider of Contact Center Secure Payment products in the key US market allowing the Group to capitalize on structural trends in a key growth market.
  • Complementary Operations - proven, successful and profitable UK business with strong recurring revenues, product offering and enterprise client relationships. Fast growing activity and revenues in the US, for both on site and cloud deployment. A number of clients operating in multiple territories through cloud delivery.
  • Attractive technology and IP - complementary services to existing product suite protected by 11 international patents.
  • Synergistic cost and revenue benefits - opportunity to rationalize cloud platforms, combine central functions and leverage combined tech as well as cross-sell Eckoh portfolio and gain access to larger target market and aggregate Telco volumes.
  • Attractive, earnings accretive acquisition - earnings-enhancing in first full year of ownership before synergies. Significantly earnings enhancing in first full year post-synergies.

Information on Syntec

Syntec is an Ofcom-regulated UK network operator, based in the UK, with an extensive patent portfolio in the UK, US, EU and Australia. Syntec is a provider of secure payment solutions (under the brand CardEasy) with additional telecom and contact center services provided predominantly in the UK. As at 11 November 2021, Syntec has 31 employees, 29 of whom are based in the UK and 2 in the US, and serves over 100 clients, with 85% of its revenue coming from clients with payment solutions. Syntec has clients in the US, UK and in broader markets across Europe. Notable clients include Wayfair, Miele, Staples, AIB and Hiscox with approximately 70% of new customers US based.

The Board believes that the acquisition of Syntec is highly complementary to Eckoh's strategy of having a market-leading position in Customer Engagement Data and Payment Security in a global market.

Further information on the financial performance and position of Syntec can be found in the Further Information section.

Launch of the Placing
The Placing is being conducted by means of an accelerated bookbuild process ("ABB"), which will be launched immediately following the publication of this Announcement.
Singer Capital Markets Securities Limited ("Singer Capital Markets") and Canaccord Genuity Limited ("Canaccord Genuity") are acting as the Company's joint bookrunners (together the "Joint Bookrunners") in connection with the Placing.

The Placing Price of 54 pence represents a discount of 12.2 percent. to Eckoh's closing mid-price on 14 December 2021 of 61.5 pence and a premium of 6.4 percent. to Eckoh's 60-Day VWAP to 14 December 2021 (being the last practicable day prior to the publication of this Announcement).

The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

The Placing is subject to the terms and conditions set out in the Appendix (which forms part of this Announcement). The Placing is conditional on the Acquisition having become unconditional in all respects (save for any conditions relating to the Placing having become unconditional in all respects).

Rationale for the Placing and Use of Proceeds

The net proceeds of the Placing will be used to part-fund the Cash Consideration portion of the Acquisition together with associated transaction costs.

Expected Timetable of Principal Events


Date of this Announcement - 15 December
Announcement of the results of the Bookbuild -15 December
Admission and commencement of dealings in the Placing Shares on AIM - 8.00 a.m. on 22 December
Completion of the Acquisition - 22 December

For further information please contact:

Eckoh plc
Nik Philpot, Chief Executive Officer
Chrissie Herbert, Chief Financial Officer
Tel: 01442 458 300

FTI Consulting LLP
Ed Bridges / Jamie Ricketts / Tom Blundell
Tel: 020 3727 1017

Singer Capital Markets (Nomad & Joint Bookrunner)
Shaun Dobson / Tom Salvesen / Alex Bond / Kailey Aliyar
Tel: 020 7496 3000

Canaccord Genuity Limited (Joint Bookrunner)
Simon Bridges / Andrew Potts
Tel: 020 7523 8000