Proactis to acquire EGS

The global spend control and eProcurement solution provider Proactis has agreed an acquisition of rival EGS Group, making them (what Rod Jones, CEO of Proactis, believes will be) the largest public sector procurement provider in the UK.

Proactis has said that the £2.9 million deal will “deliver unparalleled scale and capabilities that, in particular will enable the UK public sector to meet the policy and commercial requirements for best value and, ultimately, redirect time and money back to the core task of providing frontline services.”

EGS will be bringing over 70 new clients, managing more than £2.5 billion of spending through 40,000 suppliers. They expect annual recurring revenue to be over £1.6 million thanks to the acquisition, with operational synergies enhancing Group profitability.

“The acquisition will further strengthen PROACTIS’ leading position in the market … with approcimately 200 Public Sector organisations controlling over £15bn of public spending across 150,000+ suppliers.”

Shares in Proactis were up 9.59% to 40p at 14:50 on Tuesday. It's an interesting move for a well-established UK firm but one that hasn't grown as strongly as its investors would have liked.

We’ll come back to this shortly; the acquisition if expected to be completed around 31st January 2014.

First Voice

  1. Two Dogs:

    Smart move by Proactis whose organic growth has stalled in the last 3-4 years. I think there is an opportunity for them to become the small cap consolidator of the eProcurement space, having done this with Requisoft, Alito and now EGS over the years.

    There are a number of vendors with turnovers of sub-£10m which if assembled together would represent something much more significant, particularly looking upstream into the now crowded sourcing market and also further downstream into the AP automation space.

    Good luck to all concerned – good move.

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