Ideagen snaps up software company in £20.5m deal

Leeds-based software company Morgan Kai has been acquired in a £20.5m deal by Nottingham-headquartered counterpart Ideagen.

Morgan Kai had developed an internal audit management product, MKinsigh,used by 370 customers across markets including the public sector, banking and finance, engineering, healthcare and energy, including the UK National Audit Office, the US Federal Reserve, Investec, the New York Stock Exchange, Shell, Bombardier and Blue Cross Blue Shield.

Ideagen will pay a total net consideration of £20.5m for Morgan Kai Group, which generated a profit before tax of of £900,000 in 2017, to be funded from its recent share placing and from existing cash reserves.

The acquisition will double the existing Ideagen internal audit business and  is expected to be immediately earnings enhancing.

David Hornsby, executive chairman of Ideagen, said: “Morgan Kai is an extremely valuable addition to the Group and is in line with our strategy of acquiring GRC business that have strong IP and growing recurring revenues.

“Internal audit has represented a core market for Ideagen since the acquisition of Pentana in 2013, the addition of MKinsight to our product portfolio will enhance our scale and capability and provide a strong platform for continued growth globally.”

Dave Irwin and Andy Miller from Sentio Partners advised Morgan Kai on the sale of the business.