SpiriTel plc, the AIM listed business communications service provider, has announced the acquisition of Edge Solutions Ltd (“Edge”) for approximately £4.8 million as the Group continues its successful acquisition strategy as a consolidator of the highly fragmented telecoms reseller sector.
Edge is based in London and is a leading provider of voice and data services to almost 200 corporate customers, which include Guoman Thistle, Boden and several blue chip financial institutions. The acquisition increases SpiriTel’s customer base to approximately 2,500 businesses. Edge’s client base delivers a market leading average customer spend of over £2,000 per month, with an annual churn rate of less than 2 percent. It is anticipated that the high quality customer base will present significant cross selling opportunities for SpiriTel.
Edge is SpiriTel’s seventh acquisition in three years. The transaction is expected to be immediately earnings enhancing and as with SpiriTel’s previous acquisitions, will be swiftly integrated into SpiriTel’s Business Division, providing operational cost synergies. The majority of SpiriTel’s revenues are now recurring in nature under long term contracts, providing an increased level of earnings visibility to the Group.
SpiriTel has also announced a £10 million fundraising from some high quality, experienced telecoms investors (including Toscafund and Synergy Capital). Their commitment represents an endorsement of both the Company’s strategy and the strength of its management team.
Commenting on the acquisition, Alastair Mills, Chief Executive of SpiriTel said: “The acquisition of Edge represents a significant step in our ‘Acquire, Integrate and Grow’ strategy. We have a track record in successful acquisition and integration and the delivery of organic growth from cross selling our converged product portfolio. We are delighted to be adding Edge to the Group and as our largest acquisition to date with a first class customer list, the deal will have a significant impact on future earnings.”
He added: “I am also delighted that Steve Burges is joining the SpiriTel team to head up our Networks line of business, the largest within the Group.
Steve Burges, Managing Director of Edge Solutions said: “This is a very exciting development for Edge staff and customers. SpiriTel is recognised as a leading provider of integrated communications services for business customers and we are looking forward to building on Edge’s recent success alongside such a well established and respected B2B service provider. We are confident of contributing to the ongoing success of SpiriTel.”