Business communications service provider SpiriTel PLC announced the acquisition of the entire issued share capital of Nessco Limited for an initial cash consideration of £1.2m.
The acquisition, SpiriTel’s eleventh since 2006, sees SpiriTel take over…
Business communications service provider SpiriTel PLC announced the acquisition of the entire issued share capital of Nessco Limited for an initial cash consideration of £1.2m.
The acquisition, SpiriTel’s eleventh since 2006, sees SpiriTel take over IP-based telephony solutions and networking services provider Nessco, a telco based near Glasgow. Nessco is said to be especially strong is the healthcare, local government and hospitality sectors, and was established just over 30 years ago. Nessco is SpiriTel’s first acquisition in Scotland, following on from the recent acquisition of Boucon Network Solutions in Wales.
SpiriTel states that the customer base represents a significant opportunity for cross sales of mobile voice and data solutions, which is a key strategy for SpiriTel in 2010.
SpiriTel has agreed to pay £1.2m in cash on completion and deferred consideration of £0.25m after nine months and £0.25m after 18 months. Performance related earn-out payments of up to £0.3m may also become payable in cash in November 2011. Prior to completion of the acquisition, some assets and operations of Nessco were transferred to the vendors. The estimated value of the Nessco net assets acquired was approximately £0.1m as at March 31, 2009. In the year then-ended, the acquired operations generated revenues of £3.2m, EBITDA of £0.2m and a loss before tax of £0.05m.
The acquisition was funded by an extension to SpiriTel’s existing debt facility with Clydesdale Bank.
SpiriTel adds that it anticipates a straightforward integration process for Nessco that will focus on leveraging the operational gearing of SpiriTel’s existing operations to deliver cost synergies. The directors of SpiriTel believe there is a significant opportunity to cross sell the group’s “complete business communications” service offering into the Nessco customer base.
The acquisition is expected to be immediately earnings enhancing.
SpiriTel CEO Alastair Mills said: “Nessco represents a rare asset, possessing
an excellent customer base, a long and successful track record of IP Telephony, specialising in Mitel solutions and supported by a highly skilled engineering team. The company’s operations are particularly complementary to SpiriTel’s and we are confident of a swift and effective integration into our business division. We are delighted to complete our first acquisition in Scotland, a deal of strategic importance to the group, which will enable us to offer genuine nationwide engineering coverage to our growing base of 4,000 business customers.”
Nessco MD Austin Davidson added: “Nessco has 30 years experience in Scotland and is recognised as a trusted provider of telephony solutions for business customers and a leader in converged communications solutions. We are confident that SpiriTel represents a strong fit for both our staff and customers. “.
