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RNS Number : 2160J
Oxford Metrics PLC
27 June 2017
27 June 2017
Oxford Metrics plc
("Oxford Metrics" or the "Company")
Acquisition of IMeasureU Limited ("IMeasureU")
Adds new dimension to strong, profitable Vicon business
Will further increase, over time, the Group's recurring revenue
base
Oxford Metrics plc (LSE: OMG) the international software company
servicing government, life sciences, entertainment and engineering
markets, is pleased to announce the acquisition of IMeasureU. Using
wearable sensors and its own proprietary software, IMeasureU has
developed a world-leading high-fidelity motion measurement system
which enables researchers and elite athletes to gain data-driven
insights into athletic performance. The Directors believe this
acquisition will contribute to the Group's five year strategic
growth plan by expanding Vicon's addressable market, accelerating
its ability to develop new Vicon product, opening up opportunities
to cross-sell, and by further increasing over time the Group's
recurring revenue base.
Rationale for the Acquisition
Last year the Group announced its five year growth plan, which
aims to double profits and triple recurring revenues by 2021. The
decision to acquire IMeasureU delivers on one of the commitments
made under this plan for FY17: to invest in Vicon as a profitable
market leader and improve its product offering. The Group believes
that the principal benefits of the acquisition will be to:
-- Create clear cross-selling opportunities with existing Vicon
customers - IMeasureU sensors have been shipped to a number of
customers who already use Vicon systems. The Inertial Measurement
Unit sensor (IMU) technology is relevant to almost all of Vicon's
existing vertical markets, particularly Vicon's 1200 sports
sciences customers, where IMU technology is already well
understood.
-- Accelerate Vicon's product roadmap - Vicon has been closely
tracking IMU technology for a number of years and this acquisition
will enable the company to bring forward product release plans in
this growing space. IMUs are a natural extension of the Vicon
product suite, and the data produced by IMU sensors can be analysed
through Vicon's existing end-user applications.
-- Expand Vicon's Total Addressable Market (TAM) - Vicon's
markets will expand in three ways: first, the lower price point of
the IMU measurement system opens access to a broader marketplace.
Second, IMU measurement can be used virtually anywhere, opening up
a greater range of measurement applications for potential Vicon
customers. Finally, the combined business will address new
SaaS-based vertical markets, where IMeasureU already has a
lead.
-- Increase the quality and recurring nature of Vicon revenue -
One of the great strengths of the Group's Yotta business is the
increasingly recurring nature of its revenue base. Vicon's revenue
base, by comparison, has considerable repeat business but a lower
level of recurring revenue which the addition of IMeasureU will
serve to increase.
IMeasureU Products and Markets
Founded in 2013 and based in Auckland, New Zealand, IMeasureU
has developed a motion measurement system which fuses Inertial
Measurement Unit sensors (IMUs) with proprietary software to
provide high fidelity movement and workload data. These wearable
sensors are lightweight and small - about the size of a GBP2 coin.
The sensors can be attached to a subject enabling researchers to
monitor and manage an athlete's performance and assist in their
recovery following injury.
While the sensors do not offer the same positional accuracy as a
Vicon system, no additional camera equipment is required. This
allows flexibility and a greater variety of applications. For
example, data can be captured outdoors and researchers can monitor
multiple subjects at the same time. With measurement solutions
starting at a few thousand US Dollars, it provides a relatively low
cost way to measure a subject's biomechanics, giving Vicon access
to a broader marketplace.
IMeasureU has two core business lines, IMU-Research and
IMU-Step. Both business lines apply the same technology but target
different markets. IMU-Research is well-established, selling
systems to researchers in the Life Sciences, Entertainment and
Engineering sectors where Vicon is already a market leader.
IMeasureU and Vicon share a number of clients, including Harvard
University and there are clear and immediate applications for the
technology right across Vicon's client base. Giving IMeasureU
access to Vicon's large direct and indirect sales channels will
offer compelling cross-sell opportunities and help to accelerate
growth.
IMU-Step sells to the elite sports market, assisting in the
rehab of injured players in elite sports, including basketball and
soccer. IMU sensors are attached to the injured player, helping
sports scientists to track the strain an athlete is under
throughout rehab, optimise the player's training regime and
minimise the time it takes to return from injury. The business line
is still at an early stage but there are already successful pilot
deployments with a number of professional teams in a variety of
sports. The engagements are expected to result in sales on a
SaaS-basis. This gives Vicon a platform to create a meaningful
recurring revenue base.
Terms of the acquisition
The acquisition comprises an initial consideration of GBP1.99m
(NZ$3.5m) paid in cash from existing resources. A deferred cash
consideration of up to GBP2.89m (NZ$5.1m) is payable: 75% is
contingent on IMeasureU achieving a series of stretching SaaS-based
recurring revenue goals and 25% is contingent on growth of existing
revenue streams measured over the course of a 27-month period
following the completion of the acquisition.
For the full year ended 31st March 2017, IMeasureU reported
revenues of NZ$0.3m, a loss before tax of NZ$0.3m and Net Assets of
NZ$0.1m. Oxford Metrics expects the acquisition to be earnings
neutral for the remainder of FY17 and FY18. Assuming the
achievement of revenue goals during the earn-out period the
acquisition is expected to make a meaningful contribution to Group
profitability in FY19 and become increasingly earnings enhancing in
subsequent financial years.
Commenting on the acquisition, Nick Bolton, CEO of Oxford
Metrics said:
"When we announced our five year plan last year our strategy was
to amplify our core. IMeasureU does exactly that, adding a new
growth dimension to Vicon from its already strong and profitable
market-leadership position. The technology will expand Vicon's
addressable market, maps neatly to sectors we already serve, and
provides a lower price point at which a broader customer base can
begin to engage with the product-set.
IMeasureU also provides a platform to inject a meaningful
SaaS-based recurring revenue stream into our Vicon business, just
as we have done with Yotta, and in line with our target to triple
recurring revenues over the next five years. This is an exciting
opportunity to secure and expand Vicon's market leading status and
drive long-term growth."
For further information please contact:
+44 (0)18 6526
Oxford Metrics plc 1800
Nick Bolton, CEO
David Deacon, CFO
+44 (0)20 3727
FTI Consulting 1000
Matt Dixon / Emma Appleton / Harry Staight
+44 (0)20 7496
N+1 Singer (NOMAD to Oxford Metrics) 3000
Shaun Dobson / James White
About Oxford Metrics
Oxford Metrics develops and markets analytics software for
motion measurement and infrastructure asset management to clients
in over 70 countries worldwide. Our list of clients across the
globe is as diverse as the markets we operate in; we help highways
authorities manage and maintain their road networks, hospitals and
clinicians decide therapeutic strategies and Hollywood studios
create stunning visual effects. And the diversity of applications
is growing all the time.
The group trades through two subsidiaries: Vicon and Yotta.
Vicon is the world's leader in high precision motion measurement
analysis to thousands of customers worldwide, including Guy's
Hospital, EA Sports, MIT and NASA and our software is used in an
ever expanding range of applications. Yotta provides cloud-based
infrastructure asset management software to central and local
government agencies and other infrastructure owners. Yotta has a
large number of high profile clients including Highways England and
Amey in the UK and VicRoads in Australia amongst others.
Founded in 1984 our group is headquartered in Oxford with
offices in Leamington Spa, Gloucester, California, Colorado and
Singapore. Since 2001, Oxford Metrics (LSE: OMG), has been a quoted
company listed on AIM, a market operated by the London Stock
Exchange.
For more information about Oxford Metrics, visit
www.oxfordmetrics.com
This information is provided by RNS
The company news service from the London Stock Exchange
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