ACS heads north with Compass buy

Aggressive firm grabs higher education software specialist for £14.5m

Advanced Computer Software Group has snapped up higher education software specialist Compass Computer Consultants Ltd for about £14.5m.

Chester-based Compass specialises in business solutions for the education sector, offering CRM software, training and support to more than 80 per cent of UK colleges and higher education establishments.

Under the terms of the deal, which comprises a total cash consideration of £14.5m net of £2.6m in cash and a freehold property, Compass will be integrated into Surrey-based ACS' Business Solutions division, which already deals with 2,000 local authorities, academies, independent schools and further education outfits including 57 universities and colleges.

According to a statement, Compass boasted revenue of £5.7m and generated £3.3m EBITDA in its financial year ended 31 July 2013, and it is expected to be immediately earnings enhancing.

Vin Murria, chief executive of ACS, said: "This earnings enhancing acquisition is complementary to the group's existing education sector offering. It provides us with greater critical mass and a broader product range for the growing education market in the UK.

"Significantly, in line with previous acquisitions, Compass has high levels of long-term recurring revenue and offers considerable opportunity for cross-selling group products and services."

Georgina O'Toole, director at analyst TechMarketView, said the deal made sense.

"With Compass, chief executive Vin Murria has been true to form once more. The acquisition is complementary to ACS' existing education sector offering, it will allow cross-selling with its existing local authority customers, and it is expected to be immediately earnings enhancing. There is no reason to doubt that Murria will perform wonders again," she said.