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Adept4 looks for CloudCoCo to improve fortunes
Managed services player is hoping the acquisition will improve its future fortunes
Managed service player Adept4 has bolstered its operations after making a move to acquire fellow IT hardware and services player CloudCoCo.
The deal valued at £6.1m will be put to a shareholder vote at a general meeting on 21 Oct, with the name also being changed at that point to CloudCoCo Group.
CloudCoCo is a couple of years old and was set up by former sales directors from Redcentric but has already indicated that it can win business and has a management team that clearly appeals to Adept4.
Once the deal is given the thumbs up from shareholders the plan is for Andy Mills, current chairman of CloudCoCo would join the board of Adept4 as CEO. Mark Halpin (founder and current CEO of CloudCoCo) will lead the business development activities, with Robert Speight and Graham Collinson (respectively CloudCoCo’s chief sales officer and chief operating officer) concentrating on existing customers of the Enlarged Group.
The acquisition comes on the back of a fairly mixed year for Adept4 after the firm lost a key contract, which it legally contested, back in April and embarked on a cost cutting programme to improve the fortunes of the business.
Back in June the firm shared interim half year numbers for the six months ended 31 March that showed that revenue of £4.2m was down from £5.4m in the same period last year and its losses had increased from £0.8m to £1.1m.
The business has been looking to reduce its costs and made it clear that the priorities for now are on serving the existing customer base rather than putting resources behind new business generation. Efforts made to reduce costs have managed to cut overheads by around £75,000 a month.
In information sent to shareholders Adept4 made it clear that it viewed the acquisition as the best opportunity for the firm to return to strong growth and secure a better future for the firm.
“We are delighted that, conditional on shareholder approval, we have agreed to acquire CloudCoCo. We are proposing to acquire a business which has expanded rapidly since establishment,” said Simon Duckworth, non-executive chairman of Adept4.
“By harnessing CloudCoCo’s proven and experienced salesforce with our existing operations, we believe that there is a clearly defined opportunity to return Adept4 to growth. We have also reached agreement, subject to completion of the acquisition, to revise the terms and reduce the level of the Group’s indebtedness. We view these proposals as positive developments as we seek to recover value for our shareholders," he added.
There has already been plenty of consolidation in the channel this year, particularly in the managed services space, as firms look to expand their portfolio of services and get themselves into a position to meet the widening demands of customers looking for digital transformation support.