Software Circle acquires Irish AI fintech
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AIF provides software to mortgage and insurance brokers and lenders in Ireland.
The total consideration of up to €9.0m will be satisfied in cash and is structured on a debt free/cash free basis. The acquisition
is expected to be cash flow generative and earnings enhancing in the first year after acquisition.
The initial consideration paid at completion was €4.33m, with deferred consideration of €0.67m to be paid on the first
anniversary of completion. Up to a further €4.0m is payable to acquire the remaining approximately 5% of AIF's share capital,
contingent upon the achievement of certain targets relating to the future financial performance of AIF (the "Earn-out").
Further information on the terms of the acquisition is set out below.
About AIF
AIF's Online Application platform was first developed in 2006 by Karl Deeter (a mortgage broker) after he saw the need for a
cloud-based mortgage platform for his own brokerage company and others in Ireland.
Since AIF's incorporation in 2020 and the acquisition of Money Advice in 2024, the company has become the leading
software supplier to brokers and lenders in Ireland.
AIF and its subsidiary, Lunar Technologies Limited, provide services to insurance and mortgage brokers as well as to lenders
and insurers via a suite of products, OA Mortgage, OA Life + CRM, OA Lender and OA Insurer.
Due to the breadth of functionality provided by Online Application, the business continues to experience strong growth and
enjoys very strong customer reviews (G2 4.7/5). The platform integrates with leading financial institutions and life insurance
providers.
The vendors are majority shareholder and founder Karl Deeter (CEO), Enterprise Ireland and other minority shareholders (the
"Vendors"). Karl Deeter will remain with the company post completion leading the business on a day-to-day basis.
The unaudited combined proforma financial statements for AIF and its subsidiaries for the year ended 30 December 2023
together reported revenue of €2.2m, EBIT of (€0.01m) and closing net liabilities of €0.57m. After adjustments our valuation is
based upon an expected EBIT of approximately €0.7m.
Terms of the Acquisition
The initial consideration of €4.33m was funded from existing Software Circle cash reserves. The deferred consideration of €0.67m and Earn‐out, if payable, of up to €4.0m, will be satisfied in cash.
The Earn-out, payable to acquire the remaining approximately 5% of AIF's share capital, is dependent on AIF achieving
certain earnings targets for calendar years 2026 and 2027. The Earn-out is subject to a put and call option agreement between the Company and the Vendors which will be exercised following the end of calendar year 2027 once the calculation of the Earn-out has taken place.
Gavin Cockerill, CEO said: "Karl and his team have built a remarkable business and we're proud he chose Software Circle as
the new permanent home for AIF. Together we plan to build on their momentum and solidify Online Application as the
number one platform in its field. AIF fits squarely within our acquisition strategy - high recurring revenue, sticky vertical
software, and a leadership team that shares our values and drive for success. This is a further example of our capital being
invested into a business capable of delivering sustainable returns and, with Karl, one where we see a clear opportunity to
expand its market presence."
Karl Deeter commented: "We are really pleased to find a forever home with Software Circle whose strategy of acquiring and
building software companies like ours is well established. We believe they will help bring the company to an even higher level
of achievement, which in our case is about enabling brokers to be the number one delivery channel for digital financial
services, and to be the number one firm in that space. The support from our initial investors and Enterprise Ireland has been
great and this deal rewards that trust and investment. Our full team will remain in place, and for our customers it will be
business as usual but with the added advantage of having a PLC owner who will help us deliver even more to our clients while
moving us out of the 'start-up' space so we can tackle bigger opportunities."
Outlook
Our strategy remains focused on identifying and acquiring businesses that align with our criteria. Further strengthening our
portfolio and driving sustainable growth. We are committed to maintaining our disciplined approach to acquisitions, ensuring
that each addition is aligned with our culture, enhances our overall value proposition, supports our long-term objectives and
maximises Operating Cash Flow Per Share.
The Group has a current cash balance of approximately £4.0m and an available debt facility of £10m. Our M&A pipeline
remains h
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