Adept Telecom buys Our IT Department, Brightvisions for up to £8.5m
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 taken out a £30m loan to part fund the acquisitions.
Adept Technology Group
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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.
The initial consideration will be £4.75m less the net debt plus working capital of OurIT 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 OurIT 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.
OurIT and Brightvisions will remain in the current locations in Chingford, Bevis Marks and St Neots and the former owner of OurIT will stay in his position for at least 12 months after the acquisition.
For the year ended 31 December 2015, OurIT 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.
Chief executive Ian Fishwick said: "OurIT 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.
"OurIT 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 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 OurIT.
The company said that it had outgrown the previous £15m revolving credit facility, provided by Barclays, relative to the profitability of Adept and that the new loan has a more flexible structure compared to its previous one.
Chairman Roger Wilson said: "This new bank facility provides the company with a larger and more flexible structure to enable the company continue with its strategy of acquiring earnings enhancing businesses for future growth."
Shares in Adept Telecom were down 0.25% to 316.70p at 0915 GMT.