Business communications specialist, SpiriTel (AIM: STP) announced its seventh acquisition in three years this morning, in the shape of Edge Solutions, a provider of data and voice services to around 200 corporate customers.
SpiriTel is paying an initial consideration of £3.6 million and up to £5.7 million by January 2011 if certain performance targets are met.
In the financial year ending April 2009, Edge reported revenues of £5.5 million, EBITDA (earnings before interest, tax, depreciation and amortisation) of £0.7 million and profit before tax of £0.6 million. SpiriTel confirmed this morning that Edge Solutions is currently trading “significantly ahead” of last year’s results. The acquisition is expected to be earnings enhancing.
SpiriTel is funding the acquisition with part of the proceeds of a £10 million loan note is has arranged through its largest shareholder, Penta Capital. Synergy Capital and Toscafund also participated in the loan note raise, of which £9.2 million has already been subscribed. The loan notes are convertible at 40p per ordinary share with a 10 per cent yield and are repayable at the Company's option, no later than November 2014, with a 20 per cent redemption premium.
"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,” stated Alastair Mills, Chief Executive of SpiriTel. “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."