SpiriTel moves into Scotland with its Fifth Acquisition in Five Months

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Communications services provider SpiriTel plc has announced the acquisition of the entire issued share capital of Nessco Limited for an initial cash consideration of £1.2 million. The acquisition is SpiriTel’s eleventh since 2006.

Based in Bellshill near Glasgow, Nessco is a provider of IP based telephony solutions and networking services to approximately 800 customers. The company is particularly strong in the healthcare, local government and hospitality sectors and customers include NHS Highland, Aberdeen City Council and Macdonald Hotels. Established over 30 years ago, Nessco is acknowledged as one of the leading Mitel resellers in the UK and, like SpiriTel, has the highest level of accreditation as a Premier Partner.

Nessco marks SpiriTel’s first acquisition in Scotland and, following the recent purchase of Boucon Network Solutions in Wales, the Group is now one of the few UK service providers offering genuine nationwide engineering coverage. SpiriTel expects to rapidly integrate Nessco into its Business Division, which now has offices in Bellshill, London, Wigan and Cardiff.

Since 2006, SpiriTel has been an active consolidator within the highly fragmented reseller market. The Group has selectively acquired, and rapidly integrated, high quality telecoms resellers and service providers that offer the potential to cross sell the Group’s ‘complete business communications’ portfolio. The Nessco customer base represents a significant opportunity for cross sales of mobile voice and data solutions, which is a key strategy for SpiriTel in 2010.

Under the terms of the acquisition, SpiriTel has agreed to pay £1.2 million in cash on completion and deferred consideration of £0.50 over eighteen months. In the year ended 31 March 2009 the acquired operations generated revenues of £3.2 million. The acquisition is expected to be immediately earnings enhancing.

SpiriTel anticipates a straightforward integration process for Nessco that will focus on leveraging the operational gearing of SpiriTel’s existing operations to deliver cost synergies. SpiriTel believes there is a significant opportunity to cross sell the Group’s ‘complete business communications’ service offering into the Nessco customer base.

Commenting on the acquisition, Alastair Mills, Chief Executive of SpiriTel said: “Nessco represents a rare asset, possessing an excellent customer base, a long and successful track record of IP Telephony, specialising in Mitel solutions and supported by a highly skilled engineering team. The Company’s operations are particularly complementary to SpiriTel’s and we are confident of a swift and effective integration into our Business Division.”

He added: “We are delighted to complete our first acquisition in Scotland, a deal of strategic importance to the Group which will enable us to offer genuine nationwide engineering coverage to our growing base of 4,000 business customers.”

Austin Davidson, Managing Director of Nessco said: “Nessco has 30 years experience in Scotland and is recognised as a trusted provider of telephony solutions for business customers and a leader in converged communications solutions. We are confident that SpiriTel represents a strong fit for both our staff and customers.”