SCISYS, the Chippenham-based specialist IT group, is to acquire German media software firm Annova Systems for up to €27.83m (£23.8m) in a move that will give a strong international boost to its own media & broadcast division.
SCISYS said the acquisition, which it is funding mainly from a new bank loan, was expected to be strongly earnings enhancing from next year and would signal a “step-change” in its growth prospect. 
Munich-headquartered Annova is cash generative with an order book expected to exceed €30m at the end of 2016, a growing pipeline of prospects and robust revenue visibility, it said.
The firm, which had earnings of €1.1m on €7.5m revenues last calendar year, has a strong customer base including public and commercial broadcasters across Europe, including the BBC, with which it has a 12-year contract to supply its newsroom software.
Its OpenMedia software is regarded as best in class and it boasts a highly competent and experienced workforce, said SCISYS.
SCISYS will pay €11.35m upfront in cash with a three-year earn-out of up to €16.48m in cash or shares subject to it hitting key commercial targets.
Annova, which already has a small team in London and satellite offices in Cologne, Hamburg, New York, Paris and Singapore, develops software used by journalists and editors to streamline editorial workflows across TV, radio and online.
It employs around 70 people and has a customer base that includes major public and commercial broadcasters in Germany, Switzerland, France, Belgium and Turkey with more than 50,000 daily users.
SCISYS chairman Mike Love said: “We have been looking for the compelling next acquisition for SCISYS for a number of years and this acquisition meets our criteria: it is an important strategic step for SCISYS, putting us in a stronger market position, not only within our existing German operations, but across Europe more broadly.
“Annova is a business that we know well. The acquisition adds a highly capable provider of news broadcast software systems that has demonstrated the quality of its products through its impressive customer base in a number of important European markets in which we are active.”
He said the enlarged operations would be able to offer cutting-edge software to the international media and broadcast sector with Annova’s OpenMedia product strongly complementing SCISYS’s dira! product suite developed by its media & broadcast division.
The combined operation would be able to access and increase its share of the global system automation and control market better, which is already worth an estimated $1.3bn (£800m) and expected to grow by 4% a year to 2019, said Dr Love.
SCISYS also supplies bespoke software systems, and IT-based support services to the space, government, defence and environment sectors.
The group, which employs nearly 450 staff across its offices in Chippenham, Bristol, Leicester and Reading and two in Germany, announced an operating profit of £1.1m in the six months to the end of June compared to a £1.1m loss at the same time last year.
Its shares rose by more than 5% today as investors warmed to the Annova acquisition announcement.
