Bolt-on acquisition announced

IndigoVision have announced the completion of the c.€3.0m acquisition of Agorasys SA (‘Agora’), a strategic IP bolton which is expected to add further strength to the Group’s Video Management Software (‘VMS’) tech stack. €2.5m of cash consideration (inc. €2.3m to clear debt) and 34,422 of share consideration is payable upon completion, with the remaining balance deferred dependent on certain performance contingencies. The Agora product delivers integration of multiple systems across disparate locations to a single interface, and enables standardisation of procedures, improved analytics, operating cost rationalisation and a verifiable process audit trail. Current sales at Agora include a high proportion of recurring revenues, with a scalable rental model available to central monitoring stations. Management see strong potential use cases across Utilities and other critical infrastructure verticals once integration into the Group’s product set is completed (expected back-end of FY’20E). We raise FY’20E revenue forecasts by 3.0% to $56.5m, with EBITDA rising 4.3% to $3.9m. The deal is 2% accretive to FY’20E FD earnings based on our forecasts. P/FY’20E EPS valuation sits at 6.1x compared to a discounted peer group multiple of 11.0x.