The summer M&A frenzy has continued with the news that comms VAR AdEPT has acquired Citrix and Microsoft partner Shift F7.
In the latest example of consolidation between comms and IT, AdEPT is dishing out up to £7.9m in cash for Dorking-based Shift F7, which recorded an EBITDA of £0.7m on revenues of £5m in its latest financial year.
It also continues an IT and comms convergence trend that has seen the UK's largest comms providers, among them Daisy and Chess, bulking up their IT capabilities in recent years.
AIM-listed AdEPT - a specialist in unified comms, connectivity, voice and IT - said the acquisition of Shift F7 would propel its revenues beyond £50m, bolster its presence in London and the south-east, and extend its capabilities in IT.
AdEPT said it would retain Shift F7's HQ in Dorking, Surrey, adding that the acquired firm's senior management team will also stay on post-acquisition. Some 75 per cent of Shift F7's gross margin is generated from recurring products and services, AdEPT said.
"Shift F7 is an excellent fit because it enhances our market position in IT, particularly in London," said AdEPT CEO Ian Fishwick.
"Shift F7 complements our acquisition of OurIT in February 2017 which is also focused on London and south-east commercial customers. After the Shift F7 acquisition, more than 70 per cent of AdEPT revenue will be generated from managed services including IT support, unified communications and data networks. The acquisition is expected to be earnings enhancing from completion."
The deal includes Shift F7 Group Ltd and its subsidiaries Shift F7 Ltd and Greencorn Limited
Adept is paying an initial consideration of £5m net debt and tax liabilities of Shift F7. A further £2.9m will be handed over depending on how the business performs over the next 12 months.
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