27th July 2015, London:Brady plc (BRY.L),the leading global provider of trading, processing and risk management solutions for metals, recycling, energy and soft commodities, is pleased to announce that it has acquired the assets and goodwill of the ScrapRunner product, from Enaptive Inc(“ScrapRunner”). Enaptive is a US-based company providing dispatch systems designed specifically for the scrap metal and recycling industry markets. ScrapRunner has been operating since 2003 and its clients are based throughout North America and Europe.
The total consideration payable for ScrapRunner is USD 2 million (approximately £1.3 million) payable as to USD 1.8million in cash on completion, USD 100,000 in cash one year after completion and USD 100,000 in cash two years after completion subject to any amounts that may become payable to Brady under the indemnifications. This consideration includes working capital of USD 200,000, which will be adjusted by a completion accounts verification process. The acquisition is expected to be earnings enhancing in 2015.
ScrapRunner’s unaudited draft accounts for the year ended 31 December 2014 show revenues of USD 2 million, 62 per cent. of which are recurring, generating a profit before tax of USD 694,000. As at 4 September 2015 unaudited net assets were approximately USD 157,000.
The Directors believe that the acquisition has a compelling strategic, commercial and financial rationale, in particular:
The ScrapRunner solution manages complex container pick-up and delivery scheduling, tracks the location of containers as well as tracking and reporting on the activity and location of trucks using Global Position System (GPS) tracking. These abilities will broaden Brady Recycling’s product offering and it is anticipated that it will facilitate further growth;
ScrapRunner has over 70 clients today and drivers using 1,943 handheld applications with fleet sizes ranging from 1 to 500 trucks;
ScrapRunner can be licensed for on premise hosting by the customer or licensed on a recurring revenue, Software as a Service (SaaS) basis. Currently, approximately 30 customers are using the SaaS solution which will be the ongoing licence model;
ScrapRunner has already proved to be a successful partner for Brady and the two companies have fourteen common clients, including 9 of the top 10 North American recycling companies
As with previous acquisitions, overlaying Brady’s routes to market, salesforce and commercial infrastructure is expected to accelerate the growth of ScrapRunner; and
Individuals employed by ScrapRunner have significant industry experience which will further aid the Group.
Brady’s expertise in recycling and scrap solutions combined with ScrapRunner’s strength in dispatch solutions creates an excellent platform to drive further revenue growth.
Commenting on the acquisition, Gavin Lavelle, CEO of Brady, said:
“The US scrap market is worth $100 billion in turnover, and 50% of this is already transacted using Brady software, with seven of the top 10 recycling companies using Brady. We believe recycling represents a significant opportunity for Brady and are confident that the combined ScrapRunner/Brady group can increase our global market share even further. ScrapRunner is the leading dispatch solution designed for the recycling and scrap markets and is highly complementary to our solutions, presenting opportunities to cross and up-sell on a global basis. ScrapRunner also provides further domain knowledge in the recycling and scrap markets and overall provides exciting new growth opportunities.”
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Editorial contact for Brady
Rebecca Sanders Hewett/David Ison/Charlie Geller
Tel: +44 (0) 20 7382 4730
Email: rsh@RedleafPolhill.com, di@RedleafPolhill.comor cg@RedleafPolhill.com
Notes to Editors
About Brady plc
Brady plc (BRY.L) is the largest European-headquartered provider of trading and risk management software to the global commodity, recycling and energy markets. Brady combines fully integrated and complete solutions supporting the entire commodity trading operation, from capture of financial and physical trading, through risk management, handling of physical operations, back office financials and treasury settlement, for energy, refined and unrefined metals, scrap and secondary metals, soft commodities and agricultural products.
Brady has 30 years’ expertise in the commodity markets with over 300 customers worldwide, who depend on Brady’s software solutions to deliver vital business transactions across their global operations. Brady clients include many of the world’s largest financial institutions, trading companies, miners, refiners, scrap processors, recyclers and producers, tier one banks and a large number of London Metal Exchange (LME) Category 1 and 2 clearing members and many leading European energy generators, traders and consumers.
For further information visit: www.bradyplc.com