Holders in the suspended shares of Compsoft Plc can breathe a sigh of relief following the privileged purchase at 30p of 29.9% of the equity by a concert rescue party led by Octagon Industries, and backed in the main by Close Brothers subsidiary Close In-vestment Management. Other members of the party are Euroventures, a fund […]
Holders in the suspended shares of Compsoft Plc can breathe a sigh of relief following the privileged purchase at 30p of 29.9% of the equity by a concert rescue party led by Octagon Industries, and backed in the main by Close Brothers subsidiary Close In-vestment Management. Other members of the party are Euroventures, a fund of Octagon Industries sharehol-der Octagon Investment Management, and Robb Wilmot personally, who has picked 3.48% and has been brought in for strategic advice. Wilmot is already a member of the Octagon board. Geoff Bristow, the managing director of Octagon Industries sees this grasping of the Compsoft reins as the beginning of a UK blue chip software product house, which will grow by acquisitions which will not necessarily be funded from the existing assets of the company, and the scale of which should not be gauged by the existing UKP2m turnover of Compsoft. In other words don’t rule out the company taking on bigger fish once it has established its reputation. First move though is to install him as chairman of the company, moving Nick Horgan and Heather Kearsley from their existing ex-ecutive roles into non-executive ones. Then a rights issue to raise UKP1.5m – the concert party will be left with 29.9% after the rights issue because Ms Kearsley and Horgan will not be execising all their rights. This process is also going to let in the underwriters Touche Remnant and Lang and Cruikshank for 6.05% and 3.32% respectively, and the Prudential lifting its holding to 10.55% from the present 5%. Acquisition very quickly This leaves Horgan and Ms Kearsley with about 14.5% each, a few percent more left in trusts for them and 19% out on the Unlisted Securities Market. Octagon itself has options on up to 10% of the equity, based partly on growth in earnings per share over the next four years. Accompanying the coup was release at last of the Compsoft figures for the year ended March 1987, showing UKP568,000 loss before tax on UKP2.2m turnover. Most of the losses are from operat-ions on the continent, and most of the turnover from the ageing Delta database management system that competes head on with the dominant dBase III, but has 40,000 installations worldwide. Bristow will be immediately de-emphasising European operations. He defends the existing Compsoft products, insisting that Delta outperforms dBase III in development speed by a factor of five, promises a new version in short order and says an in-house product called Debut will be also out shortly, though he wouldn’t say what it did. He said that he had a formula for working alongside existing hardware suppliers which suggests that we will see a spate of OEM deals to lead Compsoft’s recovery. Bristow will call in analysts within the month to give them a fuller picture of his product and acquisition strategy.Meanwhile the three companies that were in abortive discussions for acquisition by Compsoft – Format Ltd, Sagesoft Ltd and Multisoft Ltd – are all out of the frame for now, though Bristow emphasised his regard for all three companies and would not rule out further talks. He also promised that Compsoft would enter the services business through a small acquistion very quickly. Octagon Industries was set up to build strategy, funding and management packages for ailing information technology companies and was most recently instrumental in raising the Wordplex price and putting together a package that forced Norsk Data out of the woodwork as a white knight.