TIDMTRB
RNS Number : 5875Y
Tribal Group PLC
10 May 2019
Tribal Group plc
Acquisition of Crimson Consultants
Strategically important transaction; strengthens Tribal's
technology portfolio
Tribal Group plc, ("Tribal", the "Company" or the "Group") a
leading provider of software and services to the international
education management market, has acquired Crimson Consultants
Holdings Limited ("Crimson"), the UK's market-leading provider of
customer relationship management ('CRM') based solutions to the
education market, for a total initial consideration of GBP6m ("the
Acquisition") with a further GBP4m contingent consideration based
on meeting an annual recurring revenue target. The Acquisition will
be financed through existing cash resources.
Transaction summary
Tribal is pleased to announce this strategically important
acquisition. A summary of the highlights includes:
- Crimson's technology provides valuable, additional
functionality to Tribal Edge, Tribal's cloud-based, next generation
Student Information System (SIS). It will accelerate its speed to
market and reduces Tribal's requirement to develop this
functionality.
- Crimson brings with it a broad existing customer base and
strong relationships with universities and Further Education
colleges, presenting compelling new cross-selling opportunities
- The Acquisition will be earnings accretive in the medium term
as Tribal is reinvesting in Crimson to drive increased revenue in
markets in the near term.
- For the year ended 31 December 2018, Crimson had revenues of
GBP3.0m, operating profits (adjusted EBITDA) of GBP0.6m and net
assets of approximately GBP0.3m
- The contingent consideration is based on the Directors of
Crimson meeting challenging Annual Recurring Revenue ("ARR") growth
targets
Acquisition rationale
The acquisition is in line with Tribal's strategy of
underpinning student success through the provision of world class
education software and services, and supports our key goals of:
- delivering a cloud-based Student Information System (Tribal Edge);
- increasing Annual Recurring Revenue,
- growing market share; and,
- driving improved margin.
Crimson's market-leading CRM solutions support the marketing to
and recruitment of students, as well as the management of alumni
and fundraising.
The combination of both Tribal's and Crimson's technology
creates a broader and richer product portfolio, and a more valuable
and compelling customer proposition. Once integrated together,
educational institutions will be able to manage the end-to-end
student lifecycle from initial interest to beyond graduation
through Tribal.
Crimson has an established, growing and complementary customer
base. With Crimson's range of products integrated with our current
systems we will be able to immediately take this new functionality
to our other customers in both Higher and Further Education,
helping us to grow our share of wallet in these accounts, as well
as penetrating into competitor accounts.
We believe this is an international growth opportunity that -
with our combined resources - we are very well placed to capitalise
upon. This successful execution of our sales strategy will lead to
increased revenue without the need to increase costs, improving our
overall margin.
Like Tribal Edge, Crimson's solutions are cloud-based, with a
strong ARR. One of Tribal's goals is to improve its revenue mix
with a higher percentage of ARR and this acquisition gives us the
opportunity to drive sales and growth in this area.
Consideration
The initial consideration for the acquisition is GBP6m, with
further contingent consideration of GBP4m payable in two equal
instalments at the end of years 1 and 2 respectively. The
contingent consideration is based on meeting challenging Annual
Recurring Revenue (ARR) growth targets.
Background to Crimson Consultants
Having worked in education for over 10 years, Crimson have
successfully developed a full range of solutions that utilise the
CRM capabilities of Microsoft Dynamics 365 to create a cloud-based,
education-ready "student relationship management" solution. Crimson
provides these to many of the leading universities and colleges in
the UK, enabling them to achieve their goals of increasing student
recruitment and driving improved student experience. Customers
include the University of Cardiff, the University of Aberdeen,
Durham University and Leicester College.
Crimson is a privately held company based in Swansea,
incorporated in 2005. They are led by an experienced management
team: Gary Williams, Operations Director; John Drew, Commercial
Director; and Lee Parton, Technical Director; each with over 20
years' experience in the sector. The three directors have joined
Tribal and will move to Tribal service contracts from the date of
acquisition.
Mark Pickett, Tribal's Chief Executive Officer, commented: "The
acquisition of Crimson provides our current customers with
complementary functionality and delivers to our vision of
empowering the end to end student lifecycle. We warmly welcome all
customers who are new to Tribal and look forward to fully
supporting them with their organisation's needs into the future,
and also welcome the whole Crimson team to Tribal."
John Drew, Commercial Director of Crimson Consultants,
commented: "We are delighted to have completed the move to Tribal
and see this as the next step in the development of our business.
We already offer solutions that integrate with Tribal's current
systems, including SITS:Vision and ebs. Now with Tribal's broader
capability and wider market reach, we will be able to accelerate
and expand what we can offer to the market and will be able to
continue with our rapid growth. It is great to have found a company
with similar values and approach, and like us, a focus on the
education market."
- Ends -
For further information please contact:
Tribal Group plc Tel: 0117 313 6371
Richard Last, Executive Chairman
Mark Pickett, Chief Executive Officer
Paul Simpson, Acting Chief Financial Officer
Investec Bank plc Tel: 020 7597 5970
Sara Hale
Andrew Pinder
William Godfrey
Neil Coleman
N+1 Singer Capital Markets Limited Tel: 0207 496 3000
Shaun Dobson
Tulchan Communications LLP Tel: 0207 353 4200
James Macey White
David Ison
About Tribal Group plc
Tribal Group plc is a pioneering world-leader of education
software and services. Its portfolio includes Student Information
Systems; a broad range of education services covering quality
assurance, peer review, benchmarking and improvement; and student
surveys that provide the leading global benchmarks for student
experience. Working with Higher Education, Further and Tertiary
Education, schools, Government and State bodies, training providers
and employers, in over 55 countries; Tribal Group's mission is to
empower the world of education with products and services that
underpin student success.
About Crimson Consultants Holdings Limited
Crimson Consultants Holdings Limited is a consultancy and
development company which specialises in assisting education
organisations implement a customer engagement strategy on Microsoft
Dynamics 365 to achieve their goals of improving student
recruitment and better supporting students once attending the
institution.
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END
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