Adept Telecom has acquired Avaya reseller Centrix. The deal is structured with an initial consideration of £7 million plus the adjusted cash balance of Centrix, payable in cash at completion.
Centrix provides UC and managed service solutions that fit with the demands of Adept's existing and targeted enterprise and public sector customer base.
Approximately 80% of Centrix' revenue is generated from recurring revenue streams.
With over 300 Avaya solutions in the UK and across the world Centrix has one of the largest customer bases backed by specialist knowledge of the Avaya Aura solution in particular.
Centrix offers smart building technology via the Medusa product, which is five products rolled in to one. Medusa is a bandwidth shaper/slicer, a firewall, a switch, a reporting engine and a billing engine.
Medusa allows multi-tenanted buildings to take one or more internet connection and to share those connections to multiple businesses and then to report and bill those end users independently for their usage.
Centrix provides high end communication solutions to larger enterprise customers, particularly in the public sector, business centre and healthcare sectors which account for approximately 70% of Centrix total revenue.
It is anticipated that the proportion of revenue derived from public sector and healthcare customers for the AdEPT Group will more than double as a result of the acquisition.
Centrix will retain its current presence and customer service operation in Hook, Hampshire.
The vendors of Centrix are to be retained in their current capacity within the business for a period of at least 12 months post-acquisition.
The audited accounts of Centrix for the year ended 31 December 2014 reported turnover, operating profit and profit before tax of £8.75m, £2.26m and £2.26m respectively.
Initial consideration of £7 million plus the cash balance of Centrix at completion is payable in cash. Further consideration of up to £3.5 million may be payable in cash dependent upon the trading performance of Centrix post-acquisition.
The total consideration will be funded out of AdEPT's existing bank facilities which were renewed and extended on 23 April 2015.
Ian Fishwick, Chief Executive of Adept, said: "Centrix is an excellent fit because, like Adept, it is asset-light, complements and builds upon Adept's existing expertise and skills, and further extends its offering in the unified communications space.
"Centrix has a high level of recurring revenue and offers a well-developed customer base with long-term relationships across a range of medium and large enterprises, including the related vertical markets of public sector and healthcare. The acquisition is expected to be earnings enhancing from completion."
Evolution Capital acted as exclusive corporate finance advisors to Adept Telecom Telecom. "We are pleased to have used our significant experience in the telecoms sector to play a part in this exciting transaction,\" said Nigel Cook, MD, Evolution Capital.