Hilversum, April 14, 2023

Xillio intends to take over Colligo

In the update of January 2023 we already have the strategic cooperation and initial investment in Canadian software supplier Colligo announced. We were able to achieve so many synergies in the first quarter that we have expressed our intention to proceed with an acquisition. This acquisition also fits perfectly into the First broad then deep strategy. In short, this strategy means that we first want to carry out as many migrations as possible. Either ourselves or through partners. (Broad) And that we then want to sell other software products (such as Colligo) to generate continuous (software) revenue. Colligo provides email integration in Sharepoint and is often part of a migration process

Synergies achieved to date
Colligo has offered Xillio services to 2 of its customers. Being able to offer migrations helped seal the deal.

Xillio has offered Colligo products to 6 potential new migration customers. One of them has already signed. Being able to offer Colligo has made the deal more attractive for the customer and has increased our customer value.

There are many major migration processes in Canada. Especially in the energy and government sectors. We are ready to start prestigious projects both in energy and within the federal government. In the Netherlands we have learned that a first project can cause a snowball. To illustrate: in 2005 we carried out a major migration at the Ministry of Education. In 2009 we had carried out several migrations at all ministries. Having a local branch will help enormously with this.

By adding Colligo, we believe that recurring software turnover and profits can increase faster in the coming years.

Perhaps even more importantly: with the acquisition of Colligo, our valuation profile changes. Where we now mainly as one-off software and services
are seen as a service provider and valued at an EBITDA multiple, after the acquisition we will be seen as a software and services service provider. These are valued at a revenue multiple.

The current stock market valuation is based on 4,5 times turnover.
In our opinion, the prevailing valuation for a Software and Services provider with our growth profile is 6 times turnover.

Other Key performance indicators Q1 2023:
Growth continues unabated. In Q1 2023 we won 62% more new deals than in Q1 2022. As a result, the order pipeline with work still to be done is still very well filled. 62% is of course enormous growth. This does not mean that we will grow by 62% this year. But it does give us confidence for our expected turnover growth and the chosen strategy. We welcomed 4 new customers in Q1 2023. 18 existing customers have awarded more migration work to Xillio. So that is also going very well. We also hired an extra consultant in the first quarter, so we now have 52 employees.

 

Rikkert English
CEO Xillio Nederland BV