The main points of the deal are:
– Trace has conditionally agreed to acquire Datawise.
– The maximum consideration is £7.335 million, of which £3.21 million will be Initial Consideration, up to £125,000 will be Deferred Initial Consideration and up to £4.0 million will be Earnout Consideration.
– Datawise, which is run by its controlling shareholder Mr Joginder Sethi, specialises in the provision of IT solutions and related services, as well as the provision of skilled personnel to major financial institutions, particularly in the areas of securities trading, settlement and payment applications.
– Datawise has recently entered into a number of major contracts and it has shown significant growth which the Directors believe is set to continue if management resources are made available. Trace can provide to Datawise the required resources.
– Trace will also benefit from the Acquisition by
a) the availability to Trace Financial (its subsidiary also specialising in the financial sector) of a new source of, competitively priced, skilled technical staff
b) reducing the cost of producing its own package software
c) enabling other Group companies to offer a broader range of services to their respective clients, more competitively.
– The Directors believe that the Acquisition has the potential to enhance significantly the Enlarged Group’s earnings.
The Acquisition is conditional, upon the approval of Shareholders at the Extraordinary General Meeting, due to be held on 29 May 2001.
Commenting on the Acquisition, Clive Ingham, Chairman of Trace Computers plc said: I am delighted to announce the acquisition of Datawise. It will enable Trace to offer more cost effective software development and consultancy services to our clients and Datawise will benefit because we can provide management resources which they need to continue to grow. We expect Datawise to have an immediate positive effect on the Trace Group.
