AIM and Dublin-listed IT and communications firm Calyx plc has acquired another Irish company, Mentec, for a total sum of €16m.
Mentec supplies technical and managed services and applications to blue chip companies in Ireland and the UK.
An initial cash consideration of €9.75m and Calyx shares with a value of €2.25m was paid on completion of the acquisition. Further cash consideration of €3m will be paid, and shares to the value of €1m will be issued, in June 2007. Calyx said the cash consideration is being financed by increasing an existing term loan facility by €12 million.
Calyx said the Mentec business has similar target markets as Calyx and its products and service offering compliment the Group’s existing business. Mentec’s UK clients include Plan International, Baxter Storey and Group 4 Technology; whilst in Ireland they include the SWS Group, the Automobile Association and Dublin City University.
For the year up to 31 December 2005 Mentec’s turnover was €20.1m, earnings before interest, tax, depreciation and amortization (EBITDA) was €1.5m. Net assets were €1.1m.
The decision to acquire Mentec’s Irish and UK operation marks a continuation of an aggressive acquisition strategy that has seen Calyx acquire the UK Matrix Group of companies for €60ma and Irish security firm Entropy for €5m earlier this year.
In September Calyx reported a 61pc increase in turnover to €29.3m for the half year 2006. In June the company extended its public listing from London’s AIM to the Dublin IEX market.
Calyx founder and CEO Maurice Healy said that the acquisition of Mentec will allow Calyx to provide an increased value add service as well as cross-selling opportunities across the group.
“I am pleased we have increased our Managed Services in 2006,” Healy said. “Although this focus will impact on revenues recognised in the short term, this strategy will make Calyx a stronger business with a higher proportion of revenues being of a recurring nature.”
By John Kennedy
