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Enables IT

  • BY: Andrew Hore |
  • POSTED: 07/07/2013 |

Cloud computing services provider Enables IT is acquiring datacentre and managed IT services provider The Support Force Group for up to £1.2m in cash and shares.

This is the first acquisition since Enables reversed into Nexus Management, which has a chequered acquisition history. However, this business appears to be an excellent fit and there will be benefits from integrating it with the existing business as well as from greater utilisation of its engineers. These could enhance group profit by £60,000 or more on top of the £250,000 of EBITDA that Support Force generated in the year to April 2013.

Deferred consideration of £550,000 depends on the achievement of turnover targets in the next 12 months. Last year’s turnover was £1.2m.

A placing at 36p a share raises £910,000 to help finance the acquisition and provide working capital for Enables. The placing was also an opportunity to introduce the business to new investors.

Enables has won a £750,000 contract to design and build a datacentre for a UK healthcare business and it will recognise more than 50% of the revenues in the year to September 2013. There could be additional managed services revenues on the back of this contract.

Enables is expected to make a modest profit in the year to September 2013, rising to £398,000 in 2013-14. Enables should have net cash of around £400,000 by the end of September 2013.

At 44.5p a share, Enables is valued at £8.23m. The shares are trading on 21 times prospective 2013-14 earnings. Enables continues to look at other acquisitions.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJune2013_45.pdf

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