Accumuli Share Discussion Threads

[effortless cool] 24/3/2015 16:17

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[davidosh] 24/3/2015 16:11

I was rather disappointed with the exit price too and especially as the FinnCap house broker target is 36p so makes them look chumps too !!. If you are thinking of looking at new companies and investment strategies then this will be a great event for you...


About 24 companies will have stands each day and be presenting at the two day Mello investor workshops next month in Peterborough. We are focussing many of the workshops on long term investing and building your portfolios so will be looking at individual companies as well.




This is the direct link to the two day programme...



There must be lots of workshops there to interest any investor and we have some very well known hosts and speakers plus 24 company presentations as a bonus. They will be released in about ten days time and we want as many people that are serious about their investing to come along

Why not join us ?

[mazarin] 24/3/2015 16:01

Rather 'under-sold' in my view and having quickly looked at today's update, I believe there is plenty of 'upside' and would have much preferred to see it trading independently.

[igoe104] 24/3/2015 12:07

IC Comment.

IT security and risk management specialist Accumuli (ACM) has attracted a recommended offer from NCC Group (NCC) worth 32.8p a share or £55m in a mixture of cash and shares, an offer which has already attracted acceptances from 57.3 per cent of Accumuli shareholders. We recommend investors now await documents

[rivaldo] 24/3/2015 11:47

Brief comment from Techmarketview, not much of interest except this:



"Clearly NCC (market cap. C. £460m) is keen to boost its credentials in the security market. It already has a security consulting business under the covers of its Assurance (testing & web performance) division which has worked alongside Accumuli at some mutual customers. This rather begs the question whether NCC Group’s ‘business of three halves’ (Assurance, Escrow, Domain Services) will soon become one of four halves, given that its enlarged security activities will dwarf testing and web performance revenues."

[buffetteer] 24/3/2015 11:46

NCC by Libernum
Acquisition of Accumuli
Buy
Target price 250p | Published price 203p
NCC is acquiring UK based Accumuli for an EV of £65m. Accumuli is a provider of IT services and risk management. It will fit within NCC's Assurance (cyber security) division and enable NCC to offer a wider range of security services. The deal is primarily funded through shares (£45m shares, £10m cash). The price paid corresponds to c. 2.4x EV/Sales and 17x EV/EBITDA. While the price may appear full, businesses in the security space tend to command high prices given the growth. We expect the deal to be c. 5% earnings accretive.
Financials
NCC has announced its intention to acquire Accumuli for an EV of £65m - market cap of £55m, £5m assumed debt and £5m earn-outs/incentives. NCC is paying 32.8p per share (5.97p in cash, 0.1218 NCC shares) which is a 19% premium to yesterday's close. The deal is funded with £10m of cash and 20.4m new NCC shares (c. 9.5% additional shares issued). NCC has received 57% irrevocables. The deal is expected to close on the 1st of May. The transaction costs appear quite high at £3m.
Accumuli is expected to have £27m of revenue and EBITDA of c. £3.8m (14% margin) for the year ended March'15. NCC is therefore paying 2.4x EV/Sales and c. 17x EV/EBITDA. While limited financials have been given we expect the deal to be c. 5% accretive - c. 14% increase in EBITDA and 9.5% increase in share count.
Accumuli adds managed services
Accumuli is an UK listed (ticker - ACM LN) provider of IT services and risk management solutions. It has had a buy and build strategy and acquired 9 businesses since 2010. Most of Accumuli's revenue is UK based and it is broken into three divisions: Managed Services (c. 64% of rev.), Tech Solutions (19% of rev.) and Professional Services (17% of rev.). NCC has been working on projects with Accumuli and management believe the acquistion of Accumuli will enable NCC to offer a more comprehensive range of security services. Accumuli will be run as a separate business within NCC's Assurance (cyber security) division.
Accumuli has grown rapidly due to acquisitions. Accumuli management is staying with NCC and there doesn't appear to be much cost synergies. It has a high degree of recurring revenue. Given Accumuli's acquisitive history, integration would appear to be the biggest risk.
Accumuli issued a trading update this morning where revenue appears to be ahead of expectations. FY'15 revenue (ended Mar'15) is expected to be £27m vs Bloomberg consensus of £21.4m.

[wirralowl] 24/3/2015 11:34

Only bought in to these on the 13th for my SIPP, so very disappointed to see this news. As Buffetteer said, its another cautionary lesson in holding stock where management don't have much 'skin in the game', as their interests are not necessarily fully aligned with shareholders...

Agree with others that going forward the business synergies make sense, but as part of my research prior to buying a cyber-security firm, I'd already dismissed NCC as being over-priced, so not happy at the prospect of holding their paper now, barely 10 days later!

[mazarin] 24/3/2015 10:46

Today's announcement has had quite a negative impact on NCC share price so far and quite understandably raised questions, as typified by Masurenguy's post 291 on NCC's bb.

24 Mar'15 - 10:33 - 291 of 291
"The announced ACM acquisition proposal has clearly not gone down very well with the market so far.
I think current valuation is the issue rather than potential synergies for the combined businesses."

[aishah] 24/3/2015 09:28

Liberium Reiterate BUY and 250p target for NCC

[masurenguy] 24/3/2015 09:23

I doubt anyone would question the synergy of the acquisition - it's just the timing and the price !

[vasilis] 24/3/2015 09:21

I can see the business logic - especially as ACM and NCC have already been co-bidding for certain contracts. Therefore putting the two companies together creates greater synergies and more openness between them as they will both be 'under the same roof' sharing information they might not share as separate companies. Potential customers may also be more confident in signing up to an 'NCC + ACM' organisation with clearly more in-house resources.

Nevertheless, as Buffetteer and others point out, the price does look somewhat light taking into account ACM's success to date in a growing market - but this does have to be balanced against the BOD's view of where they see the best potential for shareholders in the future. Of course, we also need to see 'what's in it for the BOD' - but I have to say that as a business proposition it makes sense - both parties gain from this deal. We just need a little more detail as to why the ACM BOD concluded that this offer by NCC was a 'fair and reasonable' price - and for whom.

[masurenguy] 24/3/2015 09:19

Just a 5% rise, and a volume of less than 700K, after the market has been open for an hour tells the very disappointing story here. The trading update on its own, without the NCC offer, should have been good enough to take the shareprice back up over 30p, especially when it has already closed as high as 31.7p only a couple of months ago. However, the notional acquisition equivalent price of 32.8p is clearly not even tempting people to buy at the offer of 29.5p and theoretically make a quick 11% gain. The NCC price has already declined by 7% on the news this morning, so that already dilutes the paper element by 2.5% thus reducing the overall current acquisition valuation from 32.8p to 30.3p today !

[adamb1978] 24/3/2015 09:16

I'm guessing that they're justify the 32.8p price on the basis that ACm shareholders can take NCC paper and share in the upsde

[shauney2] 24/3/2015 09:06

Agree with all the above.Sold half of my holding a while back at 31p with a view to buying back.Was looking to get to the Finncap target of 36p.
Not sure to stick or twist at the moment but NCC have got a good deal.

[buffetteer] 24/3/2015 09:01

another point -we should probably take the shares.
Nick Kingsbury, non-executive chairman of Accumuli, said: "The Accumuli board is pleased to recommend this acquisition, and feels that the structure of the offer should allow Accumuli shareholders to benefit from the potential advantages of the two businesses combining. The deal should also be highly beneficial to our existing customer base."

[buffetteer] 24/3/2015 08:58

Agree with all the above comments -I do small a rat A.because the sell out price is only 15.6x forward adjusted earnings -surely should be nearer 20 with a cash generative business growing fast in a boom market & B.the management have few shares so shareholder value not top priority .Probably been offered v senior positions .another good reason to back small companies with large management shareholdings .

[battlebus2] 24/3/2015 08:25

On the cheap side imv.

[b1ggles] 24/3/2015 08:21

The RNS is under NCC. Mysteriously, though it isn't listed under ACM on the Investegate site, I still got an email alert this morning despite not having NCC as one of my alerts.

[boadicea] 24/3/2015 08:10

A very disappointing sell-out imho. It may show a 23% uplift on some ACM I bought a week ago but I was expecting much more than that within a year or so.

It also raises the problem of finding another small, profitable, fast-growing company for investment of the proceeds just when I was happy that I'd found one!

P.S.: It hasn't done the share price of NCC any good.

[adamb1978] 24/3/2015 08:05

The offer still isnt showing on Investegate...

I assume a few others on here will, like me, be calling the company and their advisors tday to try to understand why they deem 32.8p to be an acceptable price for the company. I would have been averse to ACM being taken out but the price should have been >40p given that they would like have made 2.2p+ in the year just starting and are growing like a weed. 32.8p is simply not enough

Is anyone hears anything, would welcome if they post on here

[rivaldo] 24/3/2015 07:46

That's a good spot Mas - looks like we could get a higher cash percentage if say some institutional holders are happy to take NCC paper.

[adamb1978] 24/3/2015 07:44

The worst thing about is that ACM had a blow-out H2 - £10.3m turnver in H1 but £27m for the year. I cant believe that we wouldnt have gone way higher than 32.8p per share within a matter of weeks