Amcom buy IT service provider L7 Solutions

Stuart Corner
Tuesday, 22 November 2011 20:16

IT Industry - Listed Tech

Amcom Telecommunications (ASX: AMM) has acquired, for $15m, L7 Solutions, a company specialising in the provision of IT integration solutions, managed services, advisory and related services.

The acquisition has been mostly funded by debt, which stands at $18m post the acquisition with a gearing level of 16 percent. Amcom said it had taken the opportunity to extend the maturity of its banking facilities to 31 December 2014 and increase the facility from $30.0m to $40.0m.

L7 was established in 2004 and, according to Amcom, "has a strong reputation having built its business organically in the Perth market." It employs 130 staff and has approximately 200 clients across the enterprise and government sectors. FY11 revenue was $40m.

Amcom's CEO Clive Stein said: "The acquisition is an excellent strategic fit for Amcom as it provides complementary product offerings and importantly, leverages our existing fibre network assets and opens opportunities to offer new services into our existing customer base.

"The L7 business has an extensive skills capability that will enable us to accelerate our recently launched cloud offering. There are significant cross selling opportunities into our existing 900 corporate and Government customer base'¦Both IT and telco sectors are converging in the area of cloud and managed services, we are ideally positioned to leverage these opportunities. This acquisition is an investment in the longer term growth of Amcom."

He added: "For FY13, we expect the business to deliver at least $4m in EBITDA, the first full financial year as part of the group. This means it will be strongly EPS accretive that year."