Progility plc Acquires Unify India
Progility plc (AIM: PGY), the systems integrator and project management services firm, is pleased to announce that it has agreed to acquire Unify Enterprise Communications Private Limited ("Unify India") for a total consideration of €1 million in cash from the Unify Group ("Unify Group"), the unified communications joint venture between Siemens AG ("Siemens") and US private equity firm, The Gores Group.
Unify India is a systems integrator and independent solution provider specialising in communications infrastructure, applications and services for enterprise customers. Progility understands the products and business operations of Unify India extremely well, as Progility Technologies (a division of the Group) operates a similar business in Australia.
In the financial year to 30 September 2014, Unify India generated revenues of INR 19,429 lakhs (approximately £19.9 million) and made a profit before tax of INR 1,107 lakhs (approximately £1.1 million). At that date Unify India had net assets of INR 7,477 lakhs (approximately £7.6 million).
Wayne Bos, Executive Chairman of Progility, commented, "Our plan is to re-structure Unify India, transitioning the company from being an Original Equipment Manufacturer to becoming a Tier One re-seller and distributor of products in Asia. This process will be disruptive to the business over the short term and this has been reflected in the acquisition price paid, however, we are confident that Unify India, when re-branded as part of the Group, will become an important strategic addition to Progility.
In addition, the acquisition will create an opportunity for us to introduce our expanding portfolio of other products and services to one of the world's largest markets."
Headquartered in Mumbai, Unify India currently employs 223 people and operates through a network of 21 offices throughout India. It also operates an extensive distribution network in India, Bangladesh, Nepal, Bhutan and Sri Lanka.
The senior management team, who will continue with the business post acquisition, have been in place for the past 10 years and have been responsible for attracting some of India's most established corporations as clients including: Adani, Mercedes-Benz Research, Bangalore International Airport, Infosys Limited and Volkswagen Group.
The transaction has been entered into between Unify Overseas Holdings B.V., Unify Germany Holdings B.V., Unify GmbH & Co. KG and Progility (Mauritius) Limited, a wholly owned subsidiary of the Company, which has agreed to purchase the entire issued share capital of Unify India for an aggregate consideration, payable in cash on completion, of €1 million. Completion is expected to take place on 30th December 2014.
The consideration will be funded by the issue, by Progility Finco Limited, of a further tranche of its redeemable loan stock (announced on 1 July 2014) ("Loan Notes") to DNY Investments Limited, an asset of the DNY Trust, a family trust of which Wayne Bos is a discretionary beneficiary. The Independent Directors of Progility, having consulted with Spark Advisory Partners Limited, as Nominated Adviser to the Company, consider the terms of the Loan Notes to be fair and reasonable insofar as the shareholders are concerned. In providing advice to the Independent Directors, Spark Advisory Partners Limited has taken into account the Independent Directors' commercial assessments of this related party transaction.