Fast expanding London based voice and data reseller Spiritel has announced the acquisition of tdotcom Ltd (“tdotcom”) for a total consideration of up to £260,000.
tdotcom is an award winning supplier of voice and data systems and solutions to business customers across the UK. In the financial year to 30 September 2007 tdotcom recorded revenues of £706,000 and a net loss of £98,000. At 30 September 2007 tdotcom had estimated net liabilities of £250,000.
Spiritel intends to fully integrate the business of tdotcom within its existing operations. This will substantially reduce overheads and restore tdotcom to significant profitability. It is expected that the transaction will be earnings enhancing to Spiritel within six weeks. tdotcom is primarily a reseller of Mitel equipment and solutions, of whom Spiritel is an award winning premiere partner – the highest level of accreditation for resellers.
London-based tdotcom is Spiritel’s fourth acquisition in just over a year, continuing Spiritel’s strategy to add revenue and scale to its Business division. The deal brings with it over 50 new customers, including BBC Worldwide, The City of London and The Barbican. tdotcom was also the first company in the UK to sell Mitel’s next generation dealer board solution to financial services customers. We expect the infrastructure and sales capability of our existing business to quickly grow revenues in this area. The rapid integration of tdotcom into Spiritel Business will enable it to cross sell other Group products and services to tdotcom customers including voice, broadband, WiFi and line rental.
The consideration for the acquisition is being satisfied by the payment, on completion, of £40,000 in cash, a deferred cash consideration of £70,000, plus a further £150,000 in cash payable in equal instalments after six, twelve and eighteen months dependent on the performance of the business.
Commenting on the acquisition, Alastair Mills, Chief Executive of Spiritel said: “Incorporating tdotcom, a Mitel partner, strengthens Spiritel’s strategic relationship with Mitel and is a great opportunity to quickly add additional customers and profits to our Business division. The transaction builds on our recent success through the acquisition of complementary businesses which deliver scale and organic growth opportunities from cross selling. It is typical of the type of transactions that we are pursuing where the acquired companies will quickly make a positive contribution to earnings.”