AdEPT Technology Group PLC (LON:ADT) said it completed the acquisition of cloud networking and communications specialist Datrix for up to £16mln.
The deal is expected to be earnings enhancing in the first full year. Chief executive Phil Race called it a “game-changer”, which takes “us to the forefront of next-generation networking delivery”.
Datrix, which has a strong recurring revenue base, generated £10.7mln in the 12 months to January 31 with underlying earnings (EBITDA) of £1.5mln.
The transaction will be funded from IT provider AdEPT’s new banking facilities.
It is handing over an initial £9mln to acquire the business on a debt-free basis and could hand over up to a further £7mln in earn-outs.
“Datrix, with the outstanding new products and partners it brings, builds significantly on our capabilities, adding scale and extending both our expertise and our solution breadth, which will benefit our customers in this large and growing marketplace,” CEO Race added.
Deal ticks all the boxes
Speaking to Proactive, Race said the acquisition “ticked all the boxes” for the company’s acquisition strategy, highlighting Datrix’s high level of recurring revenues and strong presence in the NHS, which he said will allow the company to “consolidate” a key vertical of its business.
“This takes us to the next level and creates a very strong core competency in next-generation networking expertise”, the CEO said.
Race also said that the combination will allow AdEPT to pursue business opportunities that the company would previously have had to walk away from, while the merger will “definitely offer a cross-selling opportunity” both ways as Datrix's clients will now have access to AdEPT’s managed IT services.
“There is a very easy read-across for both companies”, he said.
Shares in AdEPT surged 8.7% to 274p in mid-afternoon trading on Wednesday.
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