Ricardo PLC sells its software business for up to US$20.5 million to FOG Software Group, a subsidiary of Constellation Software Inc.

Ricardo PLC (LSE:RCDO) has announced that it has sold its software business unit for up to US$20.5 million (£16.8 million) to FOG Software Group, a division of Constellation Software Inc. ( TSX:CSU).

Ricardo will receive $17 million in cash, which could increase by $3 million if Ricardo Software meets certain revenue targets within 12 months of completion.

The sale will help Ricardo achieve long-term sustainable growth in energy and environmental solutions by optimizing its portfolio, the consultancy said in a statement, adding that with the reinvested proceeds, the Ricardo Software business will be able to grow under a new owner.

“The sale demonstrates further progress in optimizing Ricardo’s portfolio. This, combined with our acquisition of Inside Infrastructure earlier this year, presents positive momentum towards our ambition to become a leading strategic and engineering consultancy for environmental and energy transition solutions,” said Graham Ritchie. , general director.

Ricardo said FOG Software is a perfect fit for Ricardo Software’s next phase of growth, due to its portfolio of STEM (Science, Technology, Engineering and Mathematics) businesses, which includes CFD, visualization and analysis.

The management of Ricardo Software will transfer with the company and lead the ongoing STEM business within FOG.

FOG Software will continue to supply Ricardo with software licenses, ensuring continuity of service to its automotive and industrial customers.

For the year ended June 30, 2022, Ricardo Software generated revenue of £9.3 million and underlying operating profit of £1.8 million with gross assets of £11.2 million of pounds sterling.

Ricardo shares were trading down 0.97% at 410.00p by mid-morning.

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