Idox completes acquisition of Rippleffect

Idox (LSE: IDOX), has announced its successful acquisition of Rippleffect Studio Limited for £2m. Rippleffect, and last month’s acquisition of Open Objects, are the latest moves to help Idox get closer to achieving its target of £100m, through a combination of organic growth and acquisitions.

Rippleffect provides digital solutions for clients across the UK, working with brands like Everton FC, Liverpool FC, Visit Guernsey, UK Sport, and Wetherspoons. Services provided by the company include strategy and planning, web design and development, user experience, ecommerce, and SEO.

Rippleffect reported revenue of £6.3 million in FY15, with gross profit of £1.8 million, EBITDA of £54k, net profit of £34k, and net assets of £1.2millon.

Broker N+1 Singer welcomed the announcement, saying both acquisitions would help to extend the group’s digital capability:

"...significantly boosts its presence in social care where there are opportunities for wider cross-selling."

Singers upgrades its EPS forecasts for FY17 (+6%) and FY18 (+4%), but leaves FY16 unchanged:

"We believe Idox is experiencing positive momentum across its diversified markets and its EV/EBITDA cal’17 rating of 10.6x remains attractive."

Richard Kellett-Clarke, CEO of Idox, commented:

"The acquisition of Rippleffect significantly enhances our growing presence in the digital B2C marketplace. It supports our strategy to extend our markets as well as increasing our capability to deliver digital services across our public and private sector markets.  It is expected to be earnings enhancing and to support our target of achieving £100m of revenues in the short term to medium term."