G3 Group scoops up Australian data company

Mail operations and document management company G3 Group [NXT: GGL] has completed a multi-million dollar acquisition of an Australian data management company.

G3, which listed on the small and medium cap NXT market last June, has acquired Formfile Group for $A3.4 million.

The deal was funded by a G3 share issue of $A500,000 at 80c a share and from the company’s bank funding lines.  

Earn-out payments of up to $A500,000 may need to be paid before the third anniversary of the acquisition if certain profitability thresholds are met.

G3 chief executive Mark Brightwell says the Australian digital document management market is relatively undeveloped.

He says the acquisition is consistent with G3’s strategies to expand its traditional “old technology” paper-based services, while developing complementary “new technology” services.

Formfile specialises in document and data management, including converting physical paper documents into automated digital workflows.

The transaction, expected to be earnings per share positive, will not have any significant impact on the G3’s key operating milestones for the year to March 31, 2016, Mr Brightwell says.

In November, G3 reported a 29% first-half profit fall to $1.15 million, due to one-off NXT listing costs, business restructuring and sales declining from a year-earlier boom when customers got in ahead of a postage price hike. Revenue fell 7% to $21.8 million.

G3 was the first company to join the NXT market. It listed its 53.8 million shares at 75c apiece, giving it an implied market value of $40.4 million. Its shares last traded at 83c.

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