Location-based software company 1Spatial is reversing into AIM-quoted shell IQ Holdings.

Shares in IQ rose by 60% to 0.08p each. That would value the enlarged group at £15.3m.

A consolidation of 1,000 existing IQ shares into one new share is planned. An all-share offer of 16.345 consolidated IQ shares for each 1Spatial share will give 1Spatial's 29 shareholders 90% of the enlarged group. These shareholders are also getting a combined dividend of nearly £200,000 from 1Spatial.

The company provides software and professional services to mapping companies plus application specific services to other customers. This helps the customers to manage data and make sure that it is as up to date and accurate as possible.

The software is a one-off sale with annual support revenues. The professional services revenues are generated from maintaining and supporting the software and data.

1Spatial's clients include Ordnance Survey, Vodafone, eurographics and the Environment Agency. 1Spatial has helped the Environment Agency to efficiently update and validate its national Flood and Coastal Defence Database.

Management blames delayed contract decisions for a fall in revenues from £8.4m to £8.01m in the year to June 2010. Gross margins fell but 1Spatial reduced its admin costs. Pre-exceptional profit fell from £366,000 to £248,000. These figures do not include discontinued activities.

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IQ Holdings (IQH) share price