Xenith IP Group to acquire intellectual property practice
Date
8/24/2016 1:59:14 AM
(MENAFN- ProactiveInvestors - Australia)
Xenith IP Group Ltd (ASX:XIP) has entered into an agreement to acquire the intellectual property (IP) service provider Watermark Group, for a total consideration of $19.5 million.
Watermark is one of Australia";s longest established IP practices, employing more than 90 people nationally with offices in Melbourne, Perth and Sydney.
The acquisition is complementary to Xenith";s core business of providing a range of IP services, including registration, management, and enforcement of IP rights.
The purchase consideration of $19.5 million will comprise of $9.5 million in cash, and $10 million by way of placement of Xenith shares to the Watermark principals (escrowed for two years).
The acquisition is expected to diversify Xenith";s revenue streams, broaden its client base and enhance its geographical presence.
Significantly, the acquisition is anticipated to be EPS accretive in FY2017 on an underlying basis, with Watermark expected to contribute future maintainable EBITDA of about $2.5 million per annum.
Xenith has also successfully completed a placement to institutional and sophisticated investors, raising $6.9 million to partially fund the cash component of the purchase consideration.
The acquisition is expected to be completed in early October 2016.
Xenith is one of the top players in the Australian IP Services sector and is anticipating a pro forma EBITDA in the range of $8.8-$9.0 million for FY2016. <
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