Eighth acquisition in three years
SpiriTel plc, the business communications service provider, is pleased to announce the acquisition of ADK Communications Limited (“ADK”), for an initial consideration of up to £1.0 million, as the Group continues its successful acquisition strategy as a consolidator of the highly fragmented telecoms reseller sector.
ADK, based in Hertfordshire, is a provider of voice and data services to almost 300 SME customers. The acquisition increases SpiriTel’s customer base to approximately 2,800 businesses. ADK recorded a profit before tax of £0.46m for the year to 31 March 2009 on revenue of £1.6m and had net assets of £0.1m at that date. As an independent telecoms reseller, ADK has an above average customer spend of approximately £500 per month. ADK focuses exclusively on voice and data and the Directors of SpiriTel believe there is a significant opportunity to promote the Group’s integrated service offering into the ADK customer base.
Under the terms of the acquisition, SpiriTel has agreed to pay £1.0m in cash on completion. A performance related earn-out payment of up to £0.5m may also be payable in cash in January 2011. Based on the current performance of ADK, the Directors estimate that the additional consideration payable would be approximately £0.2 million.
ADK is SpiriTel’s eighth acquisition in three years and follows last week’s announcement of a substantial fundraising and the acquisition of Edge Solutions. 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 additional operational synergies.
Commenting on the acquisition, Alastair Mills, Chief Executive of SpiriTel said: “The acquisition of ADK is another exciting step in our acquisition-led growth strategy. The customer base is a strong fit for SpiriTel and further leverages the operational scale of our Business Division. SpiriTel has an excellent track record in effective acquisition integration and we are confident that ADK will prove a highly profitable addition to our Business Division.”
Alasdair Buckling, Director of ADK said: “We have worked hard to establish a high quality customer base and believe that in SpiriTel we have found a partner who can provide our customers with the full range of IP based communications in our rapidly evolving sector. I am delighted to link up with an award winning company such as SpiriTel and I am confident that
our customers are in good hands”.