SpiriTel, the business communications service provider, is pleased to announce the acquisition of the entire issued share capital of Boucon Network Solutions for an initial consideration of £650,000. The acquisition is SpiriTel’s ninth since 2006.
Boucon is a provider of IP-based telephony solutions, based in Swansea and, like SpiriTel, has the highest level of accreditation with Mitel as a Premier Partner. Boucon was founded in 1995 by Robert Bouché and Brian Connor and currently services a high quality customer base including the DVLA and several NHS Trusts and County Councils, with whom Boucon has contracted maintenance agreements.
The acquisition broadens both the scale and reach of SpiriTel’s rapidly growing Business Division, representing the Group’s first steps towards establishing a presence in Wales. The region is also significant in being the European base for Mitel Networks, one of the world’s leading manufacturers of IP telephony products and services.
SpiriTel has been selectively acquiring and rapidly integrating high quality telecoms service providers over the last three years as part of its strategy to act as a consolidator of the highly fragmented reseller market. Aided by a successful £10 million fundraise in November 2009, led by Penta Capital, SpiriTel subsequently acquired Edge Solutions and ADK Communications to broaden its Networks Services line of business.
SpiriTel anticipates a straightforward integration process for Boucon, utilising its tried and tested integration process. Boucon currently focuses exclusively on fixed line telephony solutions and the Directors of both companies believe that there is a significant opportunity to cross sell SpiriTel’s ‘complete business communications’ service offering, which includes network services and mobile products, into the Boucon customer base.
Under the terms of the acquisition, SpiriTel has paid £0.65 million in cash on completion. Performance related earn-out payments of up to £0.25 million may also become payable in cash by December 2011. In the financial year ending 31 March 2009, Boucon reported revenues of £1.85 million. The acquisition is expected to be immediately earnings enhancing for SpiriTel, as well as increasing the Group’s proportion of long term contractual income.
Despite a challenging economic environment, SpiriTel is performing well and on Friday announced strong half year results. Annualised revenues are now running at a rate of over £23 million generating an underlying EBITDA of more than £2.3 million. In the year to October 2009, the Business Division delivered organic revenue growth of more than 10% and a 22% increase in underlying EBITDA.
Commenting on the acquisition, Alastair Mills, CEO of SpiriTel, said: “Boucon is a strong fit, both strategically and geographically, for our IP Communications line of business. The transaction represents another significant step forward in our acquisition-led growth strategy and brings further high quality additions to our client list. ”
He added: “This is a particularly exciting transaction for SpiriTel because it establishes a presence in the Welsh market through a high quality operator which has strong links with Mitel. I am delighted to welcome the Boucon team to the Group and look forward to promoting SpiriTel’s ‘complete business communications’ offering to Boucon customers and more widely across the Welsh market.”