AIM-listed Grafenia has acquired West Yorkshire document management firm, Watermark Technologies for £2.5m.
It will pay £1.5m in cash on completion of the deal, with a further £1m to be paid on the first anniversary of the acquisition.
Shipley-based Watermark works with SMEs to help them go paperless, through its software solutions, Papercloud, Volume and VolumeRemote. Around 90% of its revenues are through annually recurring software fees.
Founded in 2003, by Tim Boggie and Stewart Spink it currently has 11 employees. Boggie and Spink will now take on a part-time consultancy role for 6 months, as James Hughes a Corporate Development Associate within Grafenia’s Software Circle team becomes Managing Director.
Boggie and Spink released a joint statement:
“We had been planning for retirement and actively seeking a new owner for the business we have built and cherished over 20 years. We believe Grafenia is the perfect home to provide continuity of support and maintain long term customer relationships developed over many years. We look forward to seeing Watermark thrive in a larger group.”
Unaudited accounts for Watermark for the year ended 31st March 2022 reported revenues of £1.21m and an EBIT of £0.44m. Its net assets were worth £0.46m.
“The acquisition of Watermark is yet another step toward growing our software nucleus. Maximising what Grafenia is good at, selling and supporting software systems that help businesses run better,” said Gavin Cockerill , Acting CEO of Grafenia.
The company stated that it expected the deal to be “cash flow generative and earnings enhancing in the first year after acquisition.”
