Ideagen – 18.75p

17 December2012 – acquisition and placing

Software group Ideagen has announced the acquisition of Plumtree Limited, a business supplying information management software to the healthcare sector for £2.5m.  The purchase is in line with the group’s strategy of acquiring profitable businesses with IP and recurring revenue streams in highly regulated sectors.  Apart from providing an entry into the healthcare sector the acquisition will also provide cross-selling opportunities.  To help fund the acquisition, which is costing £1.6m in cash, with the remaining £0.9m funded by the issue of new ordinary shares at 20p, the group has raised £6m in a placing at 19p.  The remaining funds will be used to fund future acquisitions.  This looks a sensible move and we continue to rate the shares as a BUY.

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