Castle Street acquires C4L in £20m deal

Castle Street Investments expanded its network and data assets on Tuesday, announcing the acquisition of C4L Group Holdings.

The AIM-traded company said the deal to buy the network services and data centre hosting business was worth a total consideration of £20.2m in cash and shares.

Castle Street said the acquisition of C4L was a key component in building out its platform, as it brought with it a high quality core network infrastructure with substantial capacity for growth, and a broad data centre infrastructure.

It had 45 staff based in Bournemouth and London's Docklands, providing services to more than 800 customers, primarily in the UK. More than 90% of its revenues were recurring.

C4L's current trading in the three months to 31 January delivered an annualised turnover of £14m, and run rate EBITDA of £2m with further growth expected, Castle Street's board confirmed.

"C4L combined with our recent acquisition of Selection Services demonstrates the progress we are making towards becoming an integrated IT Services and Cloud provider," said Castle Street CEO Andy Ross.

"The business has a high quality, next generation infrastructure which has been well invested. Allied to a successful business with high levels of recurring revenue it offers strong growth opportunities," he added.