Additional Information
Market: AIM
Sector: Software
1 year chart
1 day chart
Advanced Computer Software Group plc

Advanced Computer Software Plc comprises three main divisions: Business Solutions, Health & Care and Managed Services. Together, these divisions provide a range of software and IT services that enable public, private and third sector organisations to retain control, improve visibility and gain efficiencies through streamlined processes.

Advanced Computer Software bulks up in "sweet deal"

11th Mar 2013, 11:47 am by John Harrington
The acquisition offers opportunities for growth in Professional Services, Mobile Field Services and the not for profit sectors The acquisition offers opportunities for growth in Professional Services, Mobile Field Services and the not for profit sectors

Advanced Computer Software (LON:ASW) is to buy privately-owned Computer Software Holdings (CSH) for £110mln in cash.

CSH is a leading provider of accounting and back office software to the UK professional services market and Customer Relationship Management software for the not-for-profit market. It also provides accounting software to small-to-medium enterprises, as well as mobile solutions for field services operations.

The acquired business will be incorporated into Advanced Computer’s Business Solutions and 365 Managed Services divisions.

Reflecting the need to manage the integration of this and other recent acquisitions, Advance Computer’s chief financial officer, Barbara Firth, has been appointed chief operating officer (COO) responsible for acquisitions and integration; Paul Gibson remains COO responsible for operations across the group.

Replacing Firth as chief financial officer will be information technology industry veteran Guy Millward, currently a non-executive director of Advanced Computer Software (ACS).

Interestingly, Firth previously held a senior finance position in newly acquired CSH, while current ACS board members Vin Murria (chief executive officer) and Michael Jackson (chairman), also held senior positions at the newly acquired company before it was sold to private equity group HgCapital in 2007.

“It is a company we know well,” Murria told Proactive Investors, adding that the acquisition was "a sweet, sweet, deal".

CSH had revenue of £61.5mln in 2012 and underlying earnings (EBITDA) of £13.2mln. Around 85% of its revenue is recurring.

In a separate announcement, ACS gave a trading update for the year to the end of February 2013 in which it indicated full year revenues from continuing operations would be not less than £119mlnl in 2011, revenues were just below the £100mln mark at £98.2mln.

Adjusted EBITDA is up 10% to at least £26.6mln from 2011’s £24.1mln.

Cash conversion remained strong at more than 100%.

"We continue to focus on delivering strong revenue and EBITDA growth, supported by excellent cash generation. We remain on course to deliver a maiden dividend later this year,” Murria revealed.

"Integration of our recent acquisitions are progressing to plan and we are well positioned to further build our business both organically and by strategic acquisition," she added.

The group, as enlarged by the acquisition of CSH, would have had pro-forma revenue of around £193.2mln in the year to 28 February 2013, including £160mln of recurring revenue.

Pro-forma adjusted EBITDA, including £1.4mln of early cost savings, has been estimated at about £42.3mln.

No investment advice

Proactive Investors North America Inc, trades as "Proactiveinvestors USA & Canada".

You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

You understand that we may be providing advertising and/or marketing services to companies mentioned on the site. A full list of companies that are paying for services from us, or our affiliated companies in the UK and Australia can be viewed here