Edinburgh’s Freeagent trading in line with hopes as RBS takeover nears

0 Ed Molyneux: Solid progress despite some ‘headwinds’ Freeagent, the Edinburghbased cloud accounting specialist being acquired by Royal Bank of Scotland, is on track for full-year sales of about £10 million.

In a brief trading update yesterday, the firm noted that revenues were expected to top £9.8m for the year to the end of March. Annualised “committed monthly recurring revenue” of £10.1m is also in line with the company’s expectations.

Net cash at the end of the period was about £2.3m, the group added.

Chief executive Ed Molyneux said: “Overall progress has been strong, particularly in our banking channel, despite headwinds in the practice channel – courtesy of the turmoil surrounding the IR35 changes.

“The RBS partnership has continued to prosper and we were pleased on 27 March to announce the terms of a recommended cash offer for Freeagent by a wholly-owned indirect subsidiary of RBS.”

Freeagent is being bought by a subsidiary of Royal Bank of Scotland in a £53m deal that will provide a windfall for Molyneux, the fintech’s founder.

It marks the bailed-out lender’s first major acquisition since its controversial crisisera £49 billion deal to buy ABN Amro, and also comes less than two years after Freeagent listed on London’s Alternative Investment Market (Aim).

Under the terms of the transaction, RBS Bidco will acquire the entire issued and to be issued ordinary share capital of Freeagent, and shareholders will be entitled to receive 120p in cash for each Freeagent share held.

Molyneux’s own stake sits at 8.9 per cent, which equates to a windfall of about £4.7m as a consequence of the takeover.

The bank intends to continue to use the Freeagent brand.