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AdEPT Telecom plc (ADT)

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Friday 03 February, 2017

AdEPT Telecom plc

New £30 million Banking Facility and Acquisition

RNS Number : 9284V
AdEPT Telecom plc
03 February 2017
 

AdEPT Telecom Plc

 

("AdEPT" or the "Company")

New £30m Banking Facility and Acquisition

NEW BANK FACILITY

 

·     New £30 million 5 year debt facility

·     Facility structure with increased flexibility

·     Increased capacity to support acquisition growth strategy

 

AdEPT Telecom, one of the UK's leading independent providers of unified communications solutions, today announces that it has signed a £30 million 5 year revolving credit facility agreement.

 

The new larger facility is to be provided by Barclays Bank Plc ("Barclays") and The Royal Bank of Scotland Plc ("RBS) on an equal basis and will be used by the Company to fund the strategic acquisition of businesses to leverage benefits from increased scale and a wider product set.

 

Following the successful execution of the Company's acquisition strategy the Company had outgrown the previous £15 million revolving credit facility, provided by Barclays, relative to the profitability of the Company.  The new syndicated debt facility provides increased scale and has a more flexible structure when compared to the Company's previous debt facility agreement.

 

Roger Wilson, Chairman of AdEPT, commented:

"We are delighted to have obtained the support of the team at RBS to work alongside our existing debt provider, Barclays, and provide a larger syndicated debt facility.  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."

 

ACQUISITION OF OUR IT DEPARTMENT LIMITED

The Board of AdEPT also announces that it has signed an agreement with effect from 1 February 2017 to acquire the entire issued share capital of Our IT Department Limited ("OurIT") and its trading subsidiary called Brightvisions Limited ("Brightvisions"), (together referred to as "OurIT Group") both well-established UK based specialist providers of IT Services.

 

Acquisition highlights

·     Initial consideration of £4.75m less the net debt plus working capital of OurIT Group at 31 January 2017

·     Expected to be earnings enhancing from completion

·     AdEPT group revenue run rate anticipated to increase by approximately 15%

·     Long term relationships with medium to large enterprise customers

·     Highly complementary product set for telecommunication and IT convergence

·     Well-matched customer base with London and South-East focus

·     Asset-light strategy

·     Highly experienced senior management team to remain with OurIT

 

Strategic rationale

OurIT Group offers its clients the delivery of outsourced IT services and managed service solutions. The convergence of telecommunications and IT is an increasing requirement for AdEPT's existing and targeted enterprise and public sector customer base.  The highly skilled team and product set at OurIT Group will complement and enhance AdEPT's existing services, allowing AdEPT to provide a full managed service to customers, incorporating unified communications and IT.

 

AdEPT and OurIT Group have both adopted capital asset light strategies which are highly cash generative and are dedicated to offering a full suite of flexible IT, data and unified communication strategies.

 

Information on OurIT

OurIT, founded in 1993, is is a highly accredited IT services provider with over 20 years' experience, offering award winning 24 hour IT support services and technology solutions.  OurIT and Brightvisions have a directly employed team of highly skilled certified professionals, including Microsoft Gold Partner and Business Specialist, Apple Specialist, Cisco Certified Partner, Dell Preferred Partner, and is focused on providing outsourced IT services to customers in London and the South East.

 

OurIT operates from premises in Chingford, East London and Bevis Marks.  Brightvisions is based in St Neots, near CambridgeOurIT and Brightvisions will retain their current presence and customer service operations in Chingford, Bevis Marks and St Neots.  The vendor of OurIT Group is to be retained in his current capacity within the business for a period of at least 12 months post-acquisition.

 

The statutory accounts of OurIT for the year ended 31 December 2015 reported turnover, operating profit and profit before tax of £3.71 million, £0.286 million and £0.259m respectively.  Capital expenditure in the year ended 31 December 2015 was insignificant.  Net and gross assets at that date were £0.49 million and £1.07 million respectively.

 

The statutory accounts of Brightvisions for the year ended 31 December 2015 reported turnover, operating profit and profit before tax of £1.46 million, £0.165 million and £0.167m respectively.  Capital expenditure in the year ended 31 December 2015 was insignificant.  Net and gross assets at that date were £0.32 million and £0.53 million respectively.

 

Consideration

Initial consideration of £4.75 million less the net debt plus working capital of OurIT Group at 31 January 2017 ("Net Debt") is payable in cash. Further consideration of up to £3.75 million, less the Net Debt plus working capital, may be payable in cash dependent upon the trading performance of OurIT Group post-acquisition. The total consideration will be funded out of AdEPT's new bank facility, with headroom in the facility to support further acquisitive growth.

 

Ian Fishwick, Chief Executive of AdEPT, commented:

"We are delighted to have acquired such a high quality, well-run and profitable business with a strong management team.  OurIT Group 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 Group 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."

 

For more information please contact:

 

AdEPT Telecom Plc

Roger Wilson, Chairman

Ian Fishwick, Chief Executive

John Swaite, Finance Director

 

 

 

07786 111 535

01892 550 225

01892 550 243

 

Northland Capital Partners Limited

Nominated Adviser

Edward Hutton/Gerry Beaney

 

Broking

John Howes

 

020 3861 6625

 

About AdEPT Telecom plc:

AdEPT Telecom plc is one of the UK's leading independent providers of unified communications solutions.  The Company provides a complete communications portfolio of fixed line calls, line rental, mobile, IP telephony, equipment installation, managed services, IT services, Wi-Fi, IT and communications hardware and data connectivity products.  AdEPT's tailored services are used by thousands of customers across the UK and are brought together through the strategic relationships with tier-1 suppliers such as BT Openreach, Vodafone, Virgin Media, Avaya, Microsoft, Dell and Apple.

 

AdEPT is listed on the London Stock Exchange (Ticker: ADT). For further information please visit: www.adept-telecom.co.uk


This information is provided by RNS
The company news service from the London Stock Exchange
 
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