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Advanced Computer Software Plc comprises three main divisions: Business Solutions, Health & Care and Managed Services. Together, these divisions provide a range of software and IT services that enable public, private and third sector organisations to retain control, improve visibility and gain efficiencies through streamlined...Read more
Advanced Computer Software buys COA Solutions for £100 mlnFebruary 11 2010, 1:13pm
Advanced Computer Software (AIM: ASW) announced the acquisition of Redac Holdings Limited, owner of software group COA Solutions, from Alchemy Partners for £100 million, which it said was immediately earnings enhancing and highly cash generative with strong recurring revenues.
The payment for COA will comprise cash and £55 million of new bank facilities - a term loan of £25 million and revolving credit of £30 million - which are committed for three and a half years and provided by HSBC (LSE: HSBA) and Royal Bank of Scotland (LSE: RBS).
Surrey-based COA Solutions provides of software and IT services to the public and private sectors. Its principal products include systems for budgeting around patient pathways, data analysis, business intelligence, compliance, accounting and billing, procurement and document management.
It has in excess of 5,000 direct and indirect customers in healthcare, public and emergency services and the private sector.
ACS said the deal significantly strengthens its position in the healthcare and public sector markets, creating opportunities for cross-selling both ACS and COA products.
“There are substantial opportunities to cross sell our existing healthcare products into new markets while many of our existing healthcare clients could benefit from management tools in the COA product suite. Furthermore, it gives us a substantial and profitable commercial arm with a blue-chip client base that we will combine with our existing commercial arm,” said chief executive of ACS Vin Murria.
COA posted revenues of £59.8 million in the full year to 31 March 2009 - of which more than 50 percent contracted recurring - , while EBITDA (earnings before interest, taxes, depreciation and amortisation) amounted to £12.3 million. The business has more than 1,600 corporate clients including Barclays (LSE: BARC), RBS (LSE: RBS), Santander LSE: BNC, NYSE: STD, Euronext: SANT), British Airways (LSE: BAY), Virgin, Trinity Mirror (LSE: TNI) and Specsavers.
Pro-forma revenues for the enlarged group to 28 February 2010 are expected to be approximately £90 million with an EBITDA of £21 million, including £50 million of contracted recurring subscription and maintenance revenue.
ACS said that it continues to trade in line with market expectations.