Software investment specialist Third Quad Capital (TQC) has announced its acquisition of brokerage firm VSA and software distributor Softline.
TQC specialises in acquiring the rights to niche software in markets where the developer has no presence. It sells under the Ability Software International name and also operates a distribution arm, Formjet Innovations.
Publicly quoted TQC issued a statement to the markets yesterday confirming its acquisition of VSA. The new addition, which specialises in broking services for firms in the oil, gas and resources space, was bought for a nominal fee of £1.
TQC expressed its delight in bagging a company regulated and authorised by the Financial Services Authority. VSA posted a pre-tax loss of almost £100,000 in the year to 31 March, but its new owner "believes it can return VSA to profitability in its first full year of ownership".
Mac software specialist distributor Softline is also set to join the TQC fold in a £1.3m cash and shares deal. The Crawley-based distributor will be integrated into Formjet and TQC claims the deal will provide it with a well-rounded portfolio, serving both the PC and Mac worlds.
The acquisition is expected to go through on Thursday, at which point Softline owner John McCartney will also join the TQC board as executive director. To help fund the acquisitions, TQC claims to have raised £600,000 through an equity placing and by issuing convertible loan notes.
TQC chief executive Andrew Monk said: “These acquisitions transform the group, and with minimal dilution to the interests of existing shareholders. By creating two divisions in very different industries, I have given the group a diversification of earnings and also given it a size and profit stream that we intend to grow.
“I am delighted that John McCartney is joining the board and I believe his experience in and knowledge of the software industry will rapidly exploit the potential of Ability Office, the core product at Formjet.
“My personal background is in the broking industry and I am relishing the opportunity to renew old contacts and acquaintances to help us develop VSA over the coming weeks and months.”
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