Telecom Direct currently provides voice telephone services to 5,500 business customers. In the year to 31 March 2007, Telecom Direct generated revenues of £13 million and profits before tax of £0.2 million. The acquisition will therefore increase Adept’s turnover by over 60% per annum, making the Company one of the largest fixed-line resellers in the UK.
The consideration payable by Adept is subject to performance criteria. We are currently estimating a total payment of £6.4 million, to be satisfied by a cash payment of £5 million on completion, £0.4 million payable six months following completion, and the balance of £1 million payable after 12 months. As the final amount paid is subject to future operational and financial criteria the actual amount may be more or less than this. The total consideration will be funded by a mixture of cash and bank debt.
Commenting on the acquisition, Roger Wilson, Chairman of Adpet, said, “This is a very significant transaction as it has immediately changed the scale of the business and led to our ability to reach an agreement with CPW. We expect the deal to be significantly earnings enhancing over the medium term.”