Ann: ASSET: GEO: GEOOP Announces Acquisition Of InterfaceIT Pty Ltd

• Release Date: 11/03/16 08:40
• Summary: ASSET: GEO: GEOOP Announces Acquisition Of InterfaceIT Pty Ltd
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					GEO
11/03/2016 08:40
ASSET
PRICE SENSITIVE
REL: 0840 HRS GeoOP Limited

ASSET: GEO: GEOOP Announces Acquisition Of InterfaceIT Pty Ltd

GeoOp (NZAX:GEO) announces acquisition of SaaS business InterfaceIT Pty
Limited

    11 March 2016

Introduction

GEO has entered into a conditional agreement to acquire all of the shares in
InterfaceIT Pty Limited (InterfaceIT), an Australian software development
company that provides cloud-based programs for managing in-field,
face-to-face sales teams.

InterfaceIT, www.interfaceit.com (IIT), is the developer of a class-leading
mobile sales application that is used by blue-chip corporations across New
Zealand, Australia, the United States and Canada. Similar to GEO, IIT has a
focus on the mobile workforce, enabling productivity growth for companies and
their workforces.

IIT's SaaS application combines geographic and demographic data to enable
field forces to complete highly targeted personal interactions across diverse
industries such as utilities, solar and renewable energy, telecommunications,
media, food and beverage, market research and political canvassing. Customers
include Trust Power (NZ), Simply Energy (AU), Aussie Farmers Direct and
Telstra (AU) and SunRun (USA).

The application enables enterprise and SME customers to allocate territory to
their sales representatives, provides them with sales collateral and tracks
their performance and efficiency, all in real time. It integrates with its
clients' enterprise systems to create a seamless bridge between face-to-face
sales, customer sign-up and administration, while improving customer sign-up
speed and reducing the cost of sales.

GEO and IIT are approximately the same size, and are complementary in
operating model, sales model and service model.
IIT's application serves multiple industries that use, or have need for,
GEO's mobile workforce productivity suite. Cross-sales are anticipated over
time as the product suites are integrated.

Mark Weldon, Chairperson of GEO, said: "This is an exciting step - and the
right step - for GEO. The acquisition of InterfaceIT provides the business
with additional scale, additional distribution, a strong base in the United
States, realisable cost synergies, and an accelerated path to profit for the
business. The acquisition is in the best interests of all shareholders, and
the Board is very pleased to recommend this transaction."

Roger Sharp, Chairperson of InterfaceIT, and its major shareholder North
Ridge Partners (www.northridgepartners.com), said: "We have been observing
GEO for quite some time. We very much like the product, the business, the
leadership, and the prospects of the company. There is strong industrial
logic in merging InterfaceIT with GEO, we are confident of the prospects for
the combined business, and we look forward to contributing to the creation of
a suite of market-leading workforce productivity applications."

Anna Cicognani, CEO of GEO, said: "InterfaceIT is a well-run company that is
a strong workforce productivity fit with GEO. We look forward to welcoming
the stakeholders in InterfaceIT, who have a successful track record in active
technology investing, as future shareholders in GEO. We expect they will
bring additional capability to the business and help drive its journey to
profitable growth."

Since its inception in 2012, InterfaceIT has been a joint venture between
Jordan Muir, an experienced sales professional and entrepreneur who conceived
the application, and North Ridge Partners (NRP). NRP is an independent
merchant bank that advises and invests in technology companies throughout the
Asia-Pacific region.

The core InterfaceIT mobile sales application will become part of GEO's tools
for workforce management and business productivity. This is an important
strategic acquisition representing a step further in creating a multi-product
proposition for businesses that want to become more efficient and manage
their staff better, especially mobile staff. IIT has customers in Australia
and the US. The US presence will play in favour of GEO's geographic
expansion, which, through partnerships with AppDirect and MyCloudCure, will
continue to increase its presence and market share in the US territories,
starting with a focus on the West Coast.

Significant synergy benefits have been identified across the combined entity.
A detailed analysis shows around 10 -15% cost-out synergies and realisable
revenue synergies. The combined entity is expected to have significantly
reduced cash requirements and time to break even.

Terms of the Acquisition

The purchase price is NZ$9,000,000, which may increase based on the
performance of the merged entity over the 12 months following completion. The
purchase price will be satisfied by the issue of NZ$6,000,000 of shares in
GEO at a price of NZ$0.40 per share (subject to the performance adjustment)
and by the issue of 3,000,000 unlisted convertible notes with a face value of
NZ$1.00 each, such notes having a 0% coupon and a two year term (at which
time they will, at the option of the holder, be repaid or convert (at the 90
day volume weighted average price per share over the preceding 90 trading
days). The notes may convert earlier, at the

option of the holder, at the 90 day volume weighted average price per share
over the preceding 90 trading days or, if GEO undertakes a capital raise, at
the capital raise price.

The maximum fully diluted holding in GEO of the current shareholders in
InterfaceIT due to this transaction is 30.47%, subject to any shares issued
for the performance adjustment reflecting the future performance of the
merged entity.

The transaction is conditional on shareholder approval under the NZAX Listing
Rules, the Takeovers Code and as a major transaction under the Companies Act
1993, with no more than 500,000 shares being notified by shareholders as
subject to a buyout under section 110 of the Companies Act 1993.

A shareholders' meeting to approve the transaction will be called in due
course.

Governance

InterfaceIT will nominate a director for appointment to the Board, and such
director is required to be nominated and approved at the shareholders'
meeting referred to above.

Financial Analysis

Revenues of the combined entities were $4.3M at December 2015, including
Callaghan grant revenue for GEO. Operating costs of the combined entities
were $8.4M at December 2015.
Combined losses were $4.2M at December 2015.
The Companies have agreed to continue a cost reduction plan within the first
12 months of the two entities being operationally combined.

Cash reserves

The cash in the bank for the combined entities was $2.7m at 31 December 2015.

For further information please contact:

Anna Cicognani GeoOp, CEO [email protected]

Peter Gearin [email protected]

Roger  Sharp Chairperson, NRP [email protected]

About GeoOp (NZX:GEO)

GeoOp (geoop.com) is a publicly listed New Zealand-based software company
that offers complete mobile workforce management to businesses all over the
world. It's neatly wrapped into a low-cost, easy-to-use service with premium
support. GeoOp supports businesses in their journey to be more productive and
find time for more important things, providing intuitive software for devices
that are already in the hands of field workers.

About Interface IT
InterfaceIT, www.interfaceit.com (IIT), is the developer of a class-leading
mobile sales application used by blue-chip corporations across New Zealand,
Australia, the USA and Canada. IIT's SaaS application combines geographic and
demographic data to enable field forces to complete highly targeted personal
interactions across diverse industries such as utilities, solar and renewable
energy, telecommunications, media, food and beverage, market research and
political canvassing. Users include Trust Power (NZ), Simply Energy (AU),
Aussie Farmers Direct and Telstra (AU) and SunRun (USA). The application
enables Enterprise and SME customers to allocate territory to their sales
representatives, provides them with sales collateral and tracks their
performance and efficiency, all in real time. It integrates with its clients'
enterprise systems to create a seamless bridge between face-to-face sales,
customer sign-up and administration, while improving customer sign-up speed
and reducing the cost of sales. This sales application serves multiple
industries that use, or have need for, GEO's mobile workforce productivity
suite. Cross-sales are anticipated over time as the product suites are
integrated. IIT has run rate revenues of NZ$2.4m and has recently moved cash
flow positive. Since its inception in 2012,

InterfaceIT has been a joint venture between Jordan Muir, an experienced
sales professional and entrepreneur who conceived the application, and North
Ridge Partners (www.northridgepartners.com).

About North Ridge Partners

North Ridge Partners, www.northridgepartners.com (NRP), is an independent
merchant bank that advises and invests in technology companies through
Asia-Pacific. NRP is a joint venture between its management team and the
Victor Smorgon Group, and has offices in Singapore, Sydney and Melbourne and
an extensive international partner network. NRP has led and executed more
than 100 technology advisory roles, financings and mergers and acquisitions
since its formation in 2002. As an investor, NRP was previously the major
shareholder in Software of Excellence International Limited (NZX: SOE) and
travel.com.au Limited (ASX: TVL) prior to their respective sales to Henry
Schein Inc. and Wotif Group Holdings Limited. NRP is currently a cornerstone
shareholder in both Tru-Test Corporation Limited and Asia Pacific Digital
Limited (ASX: DIG).
End CA:00279128 For:GEO    Type:ASSET      Time:2016-03-11 08:40:54