Castleton Technology : Acquisition of Financial Modelling Platform IP

Castleton Technology PLC

('Castleton', the 'Company' or the 'Group')

Acquisition of Financial Modelling Solution Platform Licence

Castleton Technology plc (AIM: CTP), the software and managed services provider to the public and not-for-profit sectors, is pleased to announce that it has exercised its option to acquire an exclusive, perpetual and assignable licence in relation to the platform upon which Castleton's modelling solution, Castleton Strategic Modelling, is based (the 'Licence').

Background

On 31 May 2015 Castleton acquired Brixx Solutions Limited ('Brixx') whose solution, HousingBrixx (since renamed Castleton Strategic Modelling), enables users to produce financial models and long-term forecasts. At the time of the Brixx acquisition it was announced that the platform upon which Castleton Strategic Modelling is based was owned by Brixx International Ltd, to whom a licence fee has since been payable, and that Castleton had an option to acquire the IP for this platform (the 'Option').

Castleton has now exercised the Option to acquire the Licence (the 'Acquisition') which enables Castleton to use, modify, maintain, distribute and sell the platform. Following the Acquisition, no further licence fees are payable to Brixx International Ltd leading to an increase in margin for the Group of approximately £0.3 million per annum in relation to sales of Castleton Strategic Modelling.

Consideration

The consideration for Acquisition is £1.6 million, of which £1.1 million is to be satisfied by the issue of 1,299,094 new ordinary shares of 2 pence each in the capital of Castleton ('Ordinary Shares') at price of 82.75 pence per Ordinary Share, being the closing mid-price the day prior to exercise of the Option (the 'Share Price'). The remaining £0.5 million was paid in cash out of the Company's existing resources.

Castleton has also agreed to pay Brixx International Ltd £0.06 million for further development of the platform, such amount to be satisfied by the issue of 72,508 new Ordinary Shares at the Share Price.

Furthermore, at the date of Acquisition, £0.05 million was due and owing by the Group to Brixx International Ltd in respect of licence fees payable pre Acquisition which is to be settled by the issue of 61,079 Ordinary Shares at the Share Price. As stated above, no further licence fees are or will be payable to Brixx International Ltd.

Issue of Equity/ Total Voting Rights

Application has been made for 1,432,681 new Ordinary Shares to be admitted to trading on AIM ('Admission') and dealings are expected to commence at 8.00 a.m. on 22 June 2018.

The total number of Ordinary Shares in issue following Admission will be 80,322,513. Accordingly, the figure of 80,322,513 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interests in, or a change to their interest in the Company under the FCA's Disclosure Guidance and Transparency Rules.

About Castleton Technology plc

Castleton Technology plc is a leading supplier of complementary software and managed services to the public and not-for-profit sectors. The Group is a 'one stop shop', providing integrated housing systems via the Cloud, working in partnership with its customers and resellers to help drive efficiencies whilst improving controls and customer service. www.castletonplc.com

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.