Alito acquisition secures successful exit for Finance Wales

The acquisition of strategic procurement solutions firm Alito UK Ltd of Bridgend, South Wales, by specialist spend control software company Proactis has resulted in a successful equity realisation for Finance Wales.

Alito was acquired in a £3.25 million deal by Proactis Holdings PLC, an AIM listed company, enabling Finance Wales, Alito’s management team and individual private shareholders to realise their equity investments. The initial consideration of £1.5 million could be supplemented with a further £1.75 million dependent on future performance. Alito, which has developed a software application – Alito Procurement - focused at providing a strategic technology enabler for enterprise level procurement process transformation and risk management, had received a £400,000 equity investment from Finance Wales in March 2005.

The acquisition will see Finance Wales exit with an immediate gain and further upside provided via the deferred consideration dependent on Alito’s performance in the year ending 31st March 2008. In the past 12 months the company had turnover of £1million and posted an operating profit of £150,000.

Paul Lee, Investment Manager, Finance Wales, said: “This is a significant exit for Finance Wales, endorsing our commitment to supporting innovative, high growth Welsh companies. Alito had developed and brought to market a unique product capable of generating significant savings for organisations procuring services from a large number of suppliers. The product’s potential has been demonstrated as more than 40 local authorities have purchased it to help them control and streamline their electronic procurement processes.”

He added: “Finance Wales’ investment supported Alito’s growth at a critical time in its development. The acquisition by Proactis has confirmed Alito’s competitive position within the market and will secure its future growth potential. “Our divestment of Alito is Finance Wales’ fourth trade sale to listed companies from our Equity portfolio, and comes in a month where we also completed the successful listing on AIM of another of our investee companies.”

The Alito Procurement suite of products provides one of the most comprehensive solutions available in the market today and is focused at reducing cost inherent in the procurement process for goods and services through effective management of risk and resource.

The acquisition by Proactis will provide synergies for both companies enabling the delivery of a truly end-to-end procurement solution incorporating both strategic and operational facets of the procure-to-pay process. Proactis is a leading provider of spend control software. Proactis solutions are used in over 140 organisations in the UK in commercial, public and not-for-profit sectors.

Gareth Kempson, Managing Director of Alito, said the investment from Finance Wales was key to enabling the controlled manageable growth of the company. “The investment from Finance Wales enabled Alito to secure the resource, skill and infrastructure required to support its effective growth and development. It would have been considerably more difficult without their help and support.”

Rod Jones, Chief Executive of Proactis, said: “Alito is another excellent purchase for Proactis, fulfilling all our investment criteria. It has a strong business pipeline, a stable maintenance revenue stream and a strong customer base which can be incorporated easily to the Proactis solution. Alito is an excellent brand and will enhance our access to the public sector.”

Alito’s shareholders were advised by Geraint Rowe and Andy Charter of Gambit Corporate Finance and Jayne Aspell of Aspell and Co.