LONDON (Alliance News) - Castleton Technology PLC Monday said it has bought Impact Applications Ltd for GBP5 million and Brixx Solutions Ltd for a further GBP5 million, meaning Castleton now supports about 400 of the UK's 1,700 social housing associations.
The software and managed services provider to the public and not for profit sectors said the deals mean its group run rate revenue is now about GBP18 million, of which over half are recurring.
Impact Applications is a provider of business critical repairs management and scheduling tools to the social housing sector. It is expected to make revenue of GBP2.8 million and earnings before interest, tax, depreciation and amortisation of GBP0.8 million in the year to end-August. Brixx provides software enabling users to produce financial models and long-term forecasts and it is expected to make revenue of GBP1.3 million and Ebitda of GBP0.8 million in the 2015 calendar year.
"Castleton is on its way to being the pre-eminent supplier of software and services to the social housing sector. These two further acquisitions reinforce that strategy. Nearly a third of all the social housing associations in the UK are now Castleton customers," Chief Executive Ian Smith said.
Castleton was advised on the acquisitions by MXC Capital Advisory LLP, a subsidiary of MXC Capital Ltd, which is a key investor with a 24.3% stake.
The acquisitions will be financed from Castleton's cash resources as well as from a new banking facility with existing bank Barclays PLC. The new facility comprises a GBP5 million term loan and an overdraft facility of up to GBP2 million.
However, Castleton has also drawn down GBP1.5 million under its loan deal with MXC Capital and entered into a further loan facility of up to GBP1 million with its investor. The latest facility has an interest rate of 10% a year, a commitment fee of 4% on undrawn amounts, and has a term of six months.
Oxford Technology 4 VCT PLC said it received nearly GBP1.6 million in cash and Castleton shares for its stake in Impact Applications. It had a net investment, excluding interest on loans, of GBP486,000 at the time of the transaction.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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