IndigoVision, the Edinburgh security video specialist, has sealed the multi-million-euro acquisition of a Portuguese software specialist in a deal described as “an important building block” in its growth plan.
The Scottish group said it was buying 100 per cent of the issued share capital of Agorasys, a spin-out from the University of Lisbon, for up to €3 million (£2.6m).
Agorasys provides a “command and control” software platform that can bring together different security systems, including IndigoVision’s video management software.
The Lisbon-based venture generated revenues of €1.3m for the year ended 31 December and an operating profit of €100,000. The business had net assets of €100,000 as of the end of 2018. IndigoVision said it was paying €2.3m in cash to clear the firm’s existing debts.
Agorasy was founded by its chief executive Pedro Soares and international business development manager Bernardo Motta, both of whom are shareholders and will continue with the company.
IndigoVision said that over the next year it intends to invest some €500,000 in further developing the software for the benefit of its customers. Agorasys will only become a “material contributor” to the group’s financial performance following completion of a transitional period and investment phase, the Scots firm added.
IndigoVision told investors: “The acquisition represents an important building block in meeting the board of IndigoVision’s ambition to turn the group into one of the leading players in the video security solution space, for the benefit of our customers, our employees and our shareholders.
“The first stage of the turnaround plan started two years ago with the restructuring of the board and the executive team. his first stage was internally focused: running our business better, and involved significant organisational and senior personnel change across most departments.
“While this process will remain ongoing, much of the heavy lifting has now been done. Our revenues are growing and we have turned significant losses into profits, we have cash in the bank and a robust balance sheet with substantial working capital availability from our new debt facility.
“The next stage of our plan involves looking outwards and carefully analysing the market in which we operate. The industry we are in is highly fragmented with no dominant players nor dominant business models for the markets we target.”
In August, IndigoVision hailed a “milestone” for the business after reporting a first-half profit for the first time since 2014. Releasing results for the six months to June, the firm posted an operating profit of $400,000 (£332,000).
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