Advised by Evolution Capital, AdEPT Telecom, a provider of communications solutions, is to buy Our IT Department and its trading subsidiary Brightvisions, specialist providers of technology services for up to £8.5m and has agreed a £30m loan facility to part fund the acquisition.
The AIM-listed company said the acquisition will expand its services to customers and allowing AdEPT to provide a fully managed service to customers, incorporating unified communications and IT.
Chief executive Ian Fishwick said: "Our IT is an excellent fit because, like AdEPT, it is asset-light, complements and builds upon AdEPT's existing expertise and skills, and further extends the product and service portfolio by adding IT services. With the increasing convergence between telecoms and IT, this is an important step forward in our strategy to become a fully managed service provider.
"Our IT has a well-developed customer base with long term relationships across a range of medium and large enterprises. The acquisition is expected to be earnings enhancing from completion."
The initial consideration will be £4.75m less the net debt plus working capital of Our IT at the end of January payable in cash. A further £3.75m, less the net debt plus working capital, may be paid in cash depending on the trading performance of Our IT after the acquisition.
The consideration will be funded out of AdEPT's new £30m bank facility, with headroom in the facility to support further acquisitions.
Our IT and Brightvisions will remain in the current locations in Chingford, Bevis Marks and St Neots and the former owner of Our IT will stay in his position for at least 12 months after the acquisition.
For the year ended 31 December 2015, Our IT reported turnover of £3.71m, operating profit of £286,000 and pre-tax profit of £259,000. Net and gross assets at that date were worth £490,000 and £1.07m, respectively.
For Brightvisions for the year ended 31 December 2015, it reported turnover of £1.46m, operating profit of £165,000 and pre-tax profit of £167,000. Net and gross assets at that date were £320,000 and £530,000, respectively.
Transaction finance and advisors
The total consideration will be funded out of AdEPT’s bank facilities provided by Barclays and Royal Bank of Scotland. The company also gained a £30m five-year revolving credit facility from Barclays and the Royal Bank of Scotland on an equal basis. The loan will be used to fund acquisitions that will increase scale and provide a wider product set such as the acquisition of Our IT.
Corporate finance advisory services were provided by Evolution Capital (UK) Limited, based in London, and corporate legal advisory services were provided by Cripps LLP, based in Tunbridge Wells, and we thank the teams from both advisors for their professional and valued contribution in completing this acquisition.