Sale of Pulsar Platform (‘Pulsar’)
2nd October 2019
Cello Health plc (AIM: CLL), the healthcare-focused advisory group, today announces the sale of Pulsar, the social media analytics software business, to Access Intelligence Plc (“Access Intelligence”) for consideration of £4.5 million (the “Sale”) payable in Access Intelligence shares. The disposal of Pulsar will allow the Group to focus its capital investment on its higher growth and higher margin healthcare business as well as supporting the development of the core Signal business.
Pulsar comprises Fenix Media Limited and Face US Inc (“Pulsar”), and the consideration shall be satisfied through the issue of 8,653,846 ordinary shares of 5 pence each (the “Consideration Shares”) in the capital of Access Intelligence and a payment in cash of £1.
Access Intelligence (AIM: ACC) develops high quality SaaS products that address the fundamental business needs of the media, PR, marketing and communications industries. Its technology is used by more than 3,000 global organisations every day, from blue-chip enterprises and communications agencies to public sector organisations and not-for-profits. For the year ended 30 November 2018, Access Intelligence generated Adjusted EBITDA of £0.03 million and statutory losses before tax of £1.7 million from revenues of £8.9 million and, as at 31 May 2019, had net assets of £9.4 million.
Cello will continue to make use of Pulsar in partnership with Access Intelligence where there is mutual client opportunity. Unless in partnership with Cello, Access Intelligence shall not solicit Pulsar business from, or provide the Pulsar service to, certain Cello healthcare customers for a period of 24 months post completion. For the year ended 31 December 2018, Pulsar generated unadjusted losses before tax of £1.0 million from unaudited revenues of £7.0 million and, as at 30 June 2019, had gross assets of £3.2 million. The Group had £3.4 million of goodwill in its balance sheet in relation to Pulsar at 31 December 2018.
As announced by Access Intelligence today in relation to its proposed placing (the “Access Intelligence Placing”), Cello and Access Intelligence have agreed, pursuant to a placing agreement dated 2 October 2019, that 272,042 of the Consideration Shares (“Vendor Placing Shares”) shall be issued directly to Access Intelligence placees to raise gross proceeds of approximately £0.14 million to satisfy Cello’s funding obligation to Pulsar described below (the “Vendor Placing”).
Of the 8,653,846 Consideration Shares to be issued to Cello, 229,327 Consideration Shares shall be assigned to Francesco D’Orazio (the CEO of Pulsar) (the “Assignment”). The value of the consideration may be subject to adjustment following completion in accordance with the terms of the acquisition agreement with Access Intelligence, but any adjustment will be satisfied in cash and the number of Consideration Shares will not change. In the Vendor Placing referred to above, Cello has agreed that 272,042 of the Consideration Shares will be issued directly to Access Intelligence placees to raise funds to meet Cello’s obligation to fund Pulsar’s PAYE liability in respect of the value of the Consideration Shares received by Francesco D’Orazio.
Following completion of the Sale, Assignment and Vendor Placing, it is expected that Cello will hold 8,152,477 ordinary shares of 5 pence each in the capital of Access Intelligence, representing approximately 10.7 per cent. of Access Intelligence’s enlarged share capital (excluding treasury shares). Cello has undertaken to retain the 8,152,477 Consideration Shares for 18 months following completion of the Sale, and to enter into an orderly market arrangement for a further 12 months thereafter.
Mark Scott, Chief Executive of Cello commented: “We are delighted that Pulsar can now begin the next stage in its development as a business whilst enabling Cello to focus on its core healthcare activities. We look forward to the ongoing partnership with Access Intelligence, both as a shareholder and as an ongoing user of Pulsar.”