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Ideagen - Oversubscribed placing
- Published:
09 Dec 2020 -
Author:
Andrew Darley -
Pages:
9
Ideagen is a leading supplier of Integrated Risk Management (IRM) Solutions to highly regulated industries, consistently recognised by Gartner since 2016. The best of breed IRM suite has been created through both R&D and acquisition, generating 49% CAGR 2009-2021E, since we assumed coverage. The strong trading update for the period to October 2020 showed 14% annualised organic growth in ARR to £54.8m, in tandem with strong cash generation and net bank debt of £27.9m (1.4x net debt EBITDA). With organic growth clearly in hand, there remains a fragmented competitive IRM market, with M&A opportunities for additional capabilities and international growth. To confront those opportunities, the company has placed 22.7m shares (9.9% of the share capital) at 215p, raising £48.7m to enable faster M&A execution through an advantageous negotiating position. Initial dilution is followed by uplift potential once cash is deployed, and we offer scenarios based on likely returns from deployed placing proceeds.