REG - CPPGroup Plc - Accelerated disposal of Globiva

CPPGroupAnnouncement

10/09/2024 07:00

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RNS Number : 4991D  CPPGroup Plc  10 September 2024

10 September 2024

CPPGroup Plc

("CPP Group", "Group", or the "Company")

Accelerated disposal of Globiva

 

 

CPP Group (AIM: CPP), a provider of real-time, digitally delivered assistance
products which reduce disruptions to everyday life for millions of people
announces that it has completed the disposal of its 51% interest in Globiva
Services Private Ltd ("Globiva") for a total cash consideration of
approximately £3.8 million (415.5 million rupees) (the "Transaction").

 

Background

The Group held a 51% majority interest in Globiva, a Business Processes
Management company incorporated in India, with the other 49% of the shares
beneficially owned by the three founders of Globiva, Navneet Gupta, Vikram
Singh Nathawat, and Ashish Goyal, who manage the business (the "Globiva
Founders").

 

On 27 November 2023, the Group confirmed that it had agreed with the Globiva
Founders to the disposal of its 51% interest in Globiva over a three-year
period concluding in Q1 2027. The total aggregate consideration of
approximately £4.7 million(1) (515.0 million rupees) was based on forecast
EBITDA for the 2023, 2024 and 2025 financial years and subject to a maximum
adjustment of plus or minus 10% (the "Original Agreement").

 

Disposal

Globiva's earnings outlook, due to a general slowdown in the Indian technology
market, has deteriorated. At the request of the Globiva Founders the Group has
agreed to accelerate the disposal of its interest in Globiva, previously
scheduled to complete in Q1 2027, and in accordance with the Original
Agreement to apply the 10% reduction to price.

 

The revised consideration of £3.8 million (415.5 million rupees) reflects the
lower end of the Original Agreement and is net of the benefit accruing (a net
present value adjustment) to the Group of receiving the cash consideration in
full on completion rather than over a three-year period.

 

For the 2023 financial year, Globiva contributed EBITDA of £2.2 million to
the Group's overall EBITDA of £3.5 million (restated), albeit the Group's
shareholders only ultimately benefitted from 51% of Globiva's results. As at
31 December 2023, Globiva had net assets of £4.2 million. The proceeds from
the Transaction will support the Group's transformation to a digitally led
parametric business.

 

The Transaction constitutes a related party transaction, pursuant to Rule 13
of the AIM Rules for Companies, as the Globiva Founders are Directors of
Globiva. The Group's Directors consider, having consulted with the Company's
nominated adviser, Panmure Liberum Limited, that the terms of the Transaction
are fair and reasonable insofar as the Company's shareholders are concerned.

 

Simon Pyper, CEO of CPP Group, commented:

"The accelerated disposal of Globiva is consistent with our strategy and is
another positive step as we simplify the Group and transform to a digitally
led parametric business."

(1) Calculated at current exchange rates. The Indian rupee has weakened since
November 2023 reducing the expected Sterling consideration.

Enquiries:

 

CPP Group plc

Simon Pyper, Chief Executive Officer                   Tel:
+44 (0)7917 795601

David Bowling, Chief Financial Officer

 

Panmure Liberum

(Nominated Adviser and Sole Broker)                  Tel: +44
(0)20 3100 2000

Richard Lindley

Will King

 

About CPP Group:
 
CPP Group is a technology-driven assistance company that creates embedded and ancillary real-time assistance products and resolution services that reduce disruption to everyday life for millions of people across the world, at the time and place they are needed, CPP Group is listed on AIM, operated by the London Stock Exchange.
 
For more information on CPP visit
https://corporate.cppgroup.com (https://corporate.cppgroup.com)
/

 

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