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Formjet
- BY: Andrew Hore |
- POSTED: 21/01/2009 |
Last year’s failed acquisition is causing more pain to Formjet.
The software supplier described the business as a “significant acquisition target” back in July 2008 but pulled out in August 2008 because of problems with due dilligence. That cost £150,000 in adviser fees.
While the acquisition was being negotiated Formjet acquired £400,000 of software from the target. Formjet says that there is a concern about the legitimacy of the stock and has stopped selling it. The target company has gone into administration. The value of the remaining stock and money owed comes to £340,000.
In all, the failed acquisition has cost Formjet £490,000. The shares slumped 0.28p to 0.4p each, which values Formjet at £1m.
On top of this fourth quarter trading was poor, so Formjet will not make a profit in 2008 as hoped.
Formjet had net debt of £75,000 on 16 January 2009 but that does not include its invoice discounting facility. Formjet raised £900,000 at 0.75p a share in July 2008 to help finance the proposed acquisition.
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