AdEPT picked up for £50.3m

Managed service player (MSP) AdEPT is no stranger to acquisition, striking a fair few over the past couple of years, but this time it has been the target for Wavenet-owned Thetis Bidco Limited.

A deal has been struck by Thetis Bidco Limited, a member of the Wavenet Group and also a subsidiary of Macquarie Group Limited, to pick up AdEPT for £50.3m.

As part of the acquisition, AdEPT has cancelled its interim dividend of 2.50p for the six months ended 30 September. If the transaction does not complete, the board has made it clear the dividend will be reinstated.

AdEPT has been picked up because of the strength of the managed services market and the opportunity it presents to its fresh owners.

Ian Fishwick, chairman of AdEPT, said that it had been building a strong channel business but accepted that the moment was right to take a deal.

“Since its formation on 1 January 2003, AdEPT has been on a strategic journey that has latterly focussed on building scale and broadening its service offering in a fragmented industry and a mission to create a highly respected managed service provider to empower its customers to take advantage of the benefits of a wealth of technology from class-leading partners in a unified way,” he said.

“While we believe that the AdEPT platform can deliver long-term growth and profitability, we also recognise that uncertainties and risks exist in the short to medium term which impact AdEPT’s ability to optimise growth as a stand-alone quoted entity. We acknowledge the additional commercial benefits which could be obtained as part of a larger, well-funded group, and believe the combination of AdEPT with Wavenet will enable the next phase of AdEPT’s growth to be strongly supported,” he added.

As a result of the deal, Fishwick said the firm would be in a better position and its new owners recognised its position as a stand-alone company, adding that its shareholders would also benefit from the deal.

In response, Bill Dawson, chief executive officer of Wavenet, said that it understood the strength of the AdEPT business.

“It has created a leading AIM-quoted MSP delivering to a variety of top-tier clients. We look forward to working with the AdEPT team as part of the Wavenet Group and driving growth by focusing on the best of both Wavenet and AdEPT’s skills and services,” he said.

AdEPT has been transitioning its business from a telephony player to a broad MSP, and its most recent results – shared back in November – illustrated the progress made on that front.

Numbers for the six months ended 30 September showed revenues remaining largely flat, with global supply chain issues playing their part. Adjusted profit after tax was also similar to the level reported at the end of FY22, at £3m.

There were positive signs of transition, with 3% growth in cloud-centric strategic services, with revenues here climbing by £0.5m to £15.1m. That 3% organic increase in managed service revenue means that 89% of group revenues are now coming from those sales, which has continued to replace some of the legacy telephony business that the company is determined to move away from.