FOUR technology entrepreneurs are to share a windfall worth up to £5 million after Glasgow-based Advanced Checking Services, a company that specialises in checking driving licences, was snapped up by quoted identity management specialist GB Group.

The deal marks Chester-based GB Group’s second acquisition in Scotland in the past three weeks, after it brought software company Data Discoveries in Edinburgh during the first week in July.

Under the terms of the latest deal, GB will pay £420,000 in cash initially, plus a further sum for surplus cash depending on completion accounts.

However, the acquisition price could rise to £5m, depending on the Glasgow company’s profitability over the next four years, which means its stakeholders could be in line for significant windfalls. The largest shareholder, Glaswegian software specialist David Blockley, who founded the company in 2006 and is its business development director, holds 50.2% of Advanced Checking Services, and could be paid £2.51m for his stake if profitability pans out as forecast.

The company posted profits before interest and tax of £73,000 in the year to the end of February, 2011, on a turnover of £420,000.

Asked if he was confident that the company’s profitability would rise to the level required to trigger the £5m sale price, Mr Blockley said: “We’re extremely confident and very excited.

“It’s hard work to build a business from zero to this point, but this deal gives us access to new markets and it will take us to the next level.”

The company, which already has more than 400 clients, including Stagecoach and FedEx, specialises in the electronic checking of driving licences to enable organisations to comply with their obligations under health and safety and English corporate manslaughter legislation.

Its service uses the information from the DVLA to confirm a driver’s licence status including endorsements and entitlement to drive, and ensures compliance with regulations around an employer governance.

The company also conducts checks for insurance companies and brokers to prevent fraudulent claims.

Meanwhile fellow directors Ronald Johnson and Nicholas Southan, both of whom hold 19.8% stakes in the company, could be in line for a payout of around £990,000.

Director Adrian Parry, who has a 10% shareholding, could potentially yield £500,000.

GB said all of the company’s eight staff will be retained at the Glasgow base, including its four directors.