Telecom services provider Your Communications Ltd has purchased Eurocall, one of the UK’s largest independent providers of telecom services to the small and medium sized enterprise market, for approximately $78m.
Under terms of the deal, Your Communications’ parent United Utilities will immediately pay GBP30 million ($56m) in cash, with a further GBP12 million ($22.4m) payable in two stages over the next 18 months. United Utilities expects to fund the acquisition from the post-tax cash flows of its enlarged Your Communications business during the next three years.
John Roberts, chief executive of United Utilities, said: Our long-term strategy for the business [Your Communications] remains unchanged. We will continue to develop Your Communications with a view to its disposal at a point in time when shareholder value can be maximized.
Your Communications is a 550-strong telecoms services provider that offers voice, basic and advanced data communication services to the public sector, and small and medium-sized corporate customers. For the year ending March 31, 2003 the company posted revenue of GBP161.7 million ($302m).
Eurocall is a privately held company, founded in 1995, that provides voice, data, mobile and internet communications to the SME market. It is both profitable and cash flow positive, with annual revenue of GBP55 million ($102.7m). The company has 15,000 customers and over 100 employees.
Both of the businesses are based in Manchester, UK, and according to a statement, once their operations are integrated, it is expected that significant business improvements and savings will be achieved. It is not clear if this means lay-offs.
Hugh Logan, managing director of Your Communications said: Your Communications is making good progress towards becoming financially independent. This acquisition strengthens our commitment to the small and medium-sized enterprise market… and will further enhance our position as a leading alternative to BT and other business to business operators.
This article is based on material originally published by ComputerWire