AdEPT Telecom Plc acquires Cat Communications Ltd

21 November 2016 Author: Admin Category: news

 

Evolution Capital (UK) Limited acted as exclusive corporate finance advisors to AdEPT Telecom plc, one of the UK's leading independent providers of unified telecommunications solutions in its acquisition of the entire issued share capital of Cat Communications Ltd, a well established UK-based provider of unified comms, Avaya IP telephony, hosted IP solutions and managed services.

Acquisition Highlights

  • Initial consideration of £1.05m less the net debt of CAT at the completion
  • Further consideration of between £0.2m and £0.95m dependent on performance post acquisition
  • High recurring revenues
  • Well established and long term customer relationships
  • Avaya Aura technical skills

Information on Cat Communications

CAT, established in 2004 and based in Pewsey, Wiltshire, is a well-established UK-based specialist provider of unified communications, Avaya IP telephony, hosted IP solutions and managed services. CAT offers the delivery of complex unified communications, managed service solutions and specialist inbound call centre management to its customer base across the UK, and further supporting customers with global deployment planning and solutions in Europe. The support function of the CAT customer base is to be transferred and integrated into AdEPT’s existing site in Fleet. CAT has a high level of recurring revenue and offers a well-developed customer base with which it enjoys long term relationships.  The Board believes that the CAT technical skills and product set, particularly in relation to Avaya Aura, will complement and enhance AdEPT’s existing services already being provided from the Fleet office.  The acquisition is expected to be earnings accretive from completion.

The last filed accounts of CAT for the year ended 31 March 2015 reported turnover, operating profit and profit before tax of £1.3m, £0.3m and £0.3m respectively. Capital expenditure in the year ended 31 March 2015 was insignificant. Net and gross assets at that date were £0.2m and £0.7m respectively. Acquisition related costs of approximately £0.1m will be recognised as an expense in the statement of comprehensive income for the year ending 31 March 2017.

Consideration

On 1 November 2016 the Company acquired the entire issued share capital of CAT Communications Limited and Progressive Communications Limited (together referred to as ‘CAT’) for an initial consideration of £1.05m less the net debt of CAT at completion (approximately £0.07m), payable in cash. Further contingent consideration of between £0.2m and £0.95m will be payable, also in cash, dependent upon the performance of CAT post-acquisition.

Ian Fishwick, Chief Executive of AdEPT, commented:

"We are delighted to have acquired Cat Communications Ltd, a business with a strong customer base and recurring revenues. The additional technical skills that Cat provides will strengthen the Avaya Aura proposition that AdEPT offers and will complement the team in Fleet. My thanks to Evolution Capital for all their hard work in finding and closing this opportunity."

 

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