Hungry Advanced Computer Software gets swallowed for £725m

Private equity firm likely to be eyeing ACS's margins

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Acquisition-hungry Advanced Computer Software (ACS) has itself been acquired by private equity firm Vista for £725m.

Vin Murria, chief executive of the healthcare and biz management software and services firm, said the deal would help ACS move to its "next stage of its growth".

She said: "ACS' value has grown from £32m to £725m, with the offer price representing an increase of over 724 per cent over that period - this offer crystallises a significant return to shareholders."

Turnover at ACS rose 70 per cent to £203m for 2014, after the company went on an acquisition spending spree. However, margins remained low - with profits up 44 per cent to £13m for the same period.

Financial analysts MegaBuyte noted the high valuation of the deal, adding "the level of debt in the ACS deal will raise a few eyebrows and undoubtedly places significantly increased pressure on the business".

It added that ACS is likely to use its "software playbook to substantially increase ACS’s margins".

Earlier this ACS acquired Compass Computer Consultants for £14m. Last year the company acquired software business Computer Software Holdings for £107m.

In 2012 it acquired Fabric Technologies Limited for £4.6m and Serco Learning for £7.3m.

ACS has around 2,000 employees in the UK, US, Ireland and India. The business is split into healthcare (£30.6m), business solutions (£136m) and managed services (£37m).

Murria received a £700,000 in salary and bonus for the period, according to Companies House records.

Vista describes its sole purpose as "acquiring enterprise application software and software enabled companies." The firm has completed more than 140 deals worth $32bn (£20bn) in the last 12 months.

Further details of the proposal are expected on 31 January 2015. ®


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