Reseller AT Communications Group has acquired the entire issued share capital of Britannia Telecom Group, a specialist voice and data reseller, for £3.84 million. ATC will also assume £2 million of debt following the completion of the acquisition.
Britannia has more than 2,300 customers, predominantly located in the North West of England. Its core activities are supplying, installing and maintaining telephone systems, including fixed line voice and maintenance. Britannia has traditionally sold equipment manufactured by Toshiba, Panasonic and Samsung, and is Panasonic’s largest reseller of business systems in the north of England.
Alex Tupman, ATC Chief Executive commented, “Britannia fits our strategic acquisition programme extremely well. It has a substantial client base, most of which have long term recurring contracts providing good forward visibility. ATC intends to take advantage of a number of cross-selling opportunities across the Group, focusing on the opportunities from our enhanced portfolio, through Britannia’s strong relationships with leading manufacturers and SiNET, ATC’s fully managed hosted VoIP service.
“This earnings enhancing acquisition will be rapidly integrated into the Group, providing us with additional scale and wider coverage across the UK.”
In the year to 30 November 2005, Britannia had revenues of £5,465,000, EBITDA of £1,401,000 and profits before tax of £431,000. Long-term recurring maintenance and fixed line voice contracts account for 72% of its revenue and 73% of its gross margins. Most of Britannia’s 2,300 maintenance contracts are for seven years, with more than 2,050 customers contracted for fixed line voice contracts. Britannia’s wide client base includes JJB Sports and Specs Savers, although neither represents more than 5% of revenue.
The acquisition of Britannia supports ATC’s strategy of building scale and further capabilities across the Group’s core activities, by a combination of organic growth and earnings enhancing acquisitions. Britannia’s strong relationships with Panasonic, Toshiba and Samsung will enhance ATC’s best of breed product portfolio. There are also cross-selling opportunities within Britannia’s customer base for ATC’s wide range of products including the recently launched fully managed hosted VoIP service, SiNET. Britannia is based close to ATC’s Stockport office.
Barclays, in their continued support for the Group, has provided a £9 million acquisition facility to enable the purchase of Britannia.