Adept Telecom acquires British commercial IT firm

AdEPT Telecom has inked a deal to acquire Shift F7 next-generation UK-based IT services provider to the commercial sector.

AdEPT will fund the £5.0m acquisition, less net debt and tax liabilities of approximately £500,000 by drawing down on its existing bank revolving credit facility.

Further consideration of up to £2.9m may be payable in cash, dependent upon the trading performance of Shift F7 in its first year following the acquisition.

The AIM-listed telecom provider said the addition of Shift F7, which offers its clients outsourced managed IT and telecoms solutions, including IT support, hosted IT, cyber-security, data connectivity and next-generation IP telephony service, was "highly complementary" its existing IT service divisions.

AdEPT also highlighted that both firms were focused on highly cash-generative recurring margin and capital asset light strategies. Approximately 75% of Shift F7's gross margin is generated from recurring products and services.

Management expected the addition of Shift F7, and its subsidiaries Shift F7 Limited and Greencorn Limited, to be earnings enhancing from completion.

Chief executive Ian Fishwick, said, "We are delighted to have acquired such a high quality, well-run and profitable business with a strong management team."

As of 1040 BST, AdEPT shares had risen 6.91% to 377.40p.