BGF invests £7m in Netcall for MatsSoft acquisition

The funding has been used to support Netcall's acquisition of Beringea-backed MatsSoft, a cloud-based software provider. Netcall hopes the bolt-on will help drive its migration to cloud-based services.

Beringea fully exits MatsSoft via the transaction, bringing to an end a six-year holding period.

BGF's investment is in the form of a loan note. It has an annual interest rate of 8.5% and is repayable on or before March 2025. In connection with the loan note, BGF has been issued with options for 4.8 million Netcall shares at 58 pence per share.

The acquisition of MatsSoft involves £11.1m in cash as well as 3.5 million Netcall shares. It also includes a potential additional £2.3m in cash and £9.5m in Netcall shares due on completion, subject to certain conditions and targets being met within the next two years. Netcall's latest share price was 66 pence.

Beringea first invested in MatsSoft in March 2011, when it provided £2.65m of growth capital drawn from its ProVen and ProVen Growth & Income VCTs. According to a statement issued by the vendor, it provided additional funding in 2012.

Company
Based in Hemel Hempstead, Netcall has around 700 customers in the private and public sectors, including NHS Acute Health Trusts, BT and Lloyds Banking Group. The company's product suite includes an omnichannel contact centre, workforce optimisation and business process management. In the year to June 2017, the company expects to have generated revenue of £16.2m and adjusted EBITDA of £4.5m. Netcall was established as a company in 1984 and became listed on AIM in 2010.

MatsSoft is headquartered in Bedford, UK, and has approximately 60 customers globally across the private and public sectors, including Vodafone, Nationwide Building Society, ITV and Adur & Worthing Councils. It was founded in 2008 and employs 56 people. Its revenues amounted to £5.5m in 2016, with adjusted EBITDA of £100,000.

People
Netcall – Henrik Bank (CEO).
Business Growth Fund – Tom Jenkins (investor).

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