Advanced Computer Software hails 'significant' bolt-on acquisition
Advanced Computer Software (ACS) has purchased a accounting and back-office software firm which will increase annual revenues by around 60 per cent, the company announced on Friday.
Alongside an upbeat pre-close trading update , the AIM-listed software and IT services provider said that it has acquired Computer Software Holdings (CSH) from HgCapital for £110m in cash, financed partly by existing cash resources, new bank debt and a recent share placing that raised £44m (gross).
CSH works in the UK professional services market (legal and coroners), provides Customer Relationship Management (CRM) software for the not-for-profit market, and also makes accounting software to small businesses as well as mobile solutions for field services operations. It will become part of ACS's Business Solutions and 365 Managed Services divisions.
Separately, the company said it has performed strongly across all of its three divisions - Business Solutions, Health & Care and Advanced 365 (Managed Services) - over the past 12 months with revenues in the year ended February 28th 2013 expected to come in at £119m, up 21% year-on-year.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) are forecast to rise 10% to no less than £26.6m.
With the acquisition of CSH, ACS said that pro forma revenue would have been £193.2m in the last financial year, with adjusted EBITDA of £42.3m.
Chief Executive Vin Murria said: "This immediately earnings enhancing acquisition is a tremendous opportunity for both ACS and CSH which will also significantly enhance the scale of our Business Solutions and Managed Services divisions. The business and many of the management team are well known to us which will simplify the integration process."
ACS also announced that non-executive director Guy Millward is to become the group's Chief Financial Officer (CFO) as current CFO switches to the Chief Operating Officer position.