Ian Smith continues M&A spree with Castleton venture

Castleton snaps up Impact Applications Limited and Brixx Solutions Limited in £10m swoop

Serial channel entrepreneur Ian Smith's venture Castleton has continued its M&A streak today by snapping up Impact Applications Limited and Brixx Solutions Limited for a combined total of £10m.

Founded in 2013, out of the remnants of Redstone, Castleton has completed four acquisitions already and Smith has previously indicated to CRN he intends to acquire nine firms with this vehicle.

Today it was announced that the software and services player has acquired Impact Applications Limited, which provides software management repairs for the social housing sector, for £5m. For the year ending 31 August 2015, Impact's predicted EBITDA is £800,000 on sales of £2.8m.

The acquisition will allow Castleton to integrate its CRM into Impact's software to provide an end-to-end customer service, according to a statement.

Castleton also gobbled up Brixx Solutions Limited, which delivers software to help companies in the social housing sector produce financial models and long-term forecasts. For the year ending 31 December 2015, Brixx's EBITDA was £800,000 on revenues of £1.3m.

Speaking on the announcement, Smith, Castleton's chief executive, said: "Castleton is on its way to being the pre-eminent supplier of software and services to the social housing sector. These two further acquisitions reinforce that strategy. Nearly a third of all the social housing associations in the UK are now Castleton customers.

"The acquisitions of Brixx and Impact complete the initial steps in building our platform; our focus will now be on integrating our products and services."

The acquisitions were funded by Castleton's existing cash pot alongside a £5m loan from Barclays plc and a loan agreement with MXC Capital Limited, of which Smith is a central shareholder.

Investment vehicel MXC is also a major investor in Castleton, owning 24.3 per cent. The investment house raised £12m through placing of shares last month.

The latest acquisitions will bring Castleton's revenues to about £18m and mean it now supports 400 of the UK's 1,700 housing associations, it claims.