Adept Technology Share Discussion Threads

[value viper] 16/11/2021 12:31

Been listed a long while of courseWas this price back in 2015 Research and liquidity both thinJust a thought

[red ninja] 16/11/2021 12:27

I agree a takeover is a possibility, but that has been suggested for a while.

[value viper] 16/11/2021 12:16

Thanks Red for that update from the co broker Just looking at the shareholder listKingsman with 21% obviously very significant - if you add all the Fishwick holdings - real controlIs a buy out not beyond realms ? Not sure I like the idea but......NRI

[value viper] 16/11/2021 12:11

Still a seller25,000 sub bid @ 208.90p

[red ninja] 16/11/2021 11:47

Singer Capital Markets comment :-

"AdEPT has produced a resilient H1 despite some continued CV19 & supply chain headwinds in the period and expects to meet FYMar22 expectations. What we think the market is missing here is the extent to which AdEPT has built out its Cloud Services offerings over the recent years. The move deeper into high growth areas such as SD-WAN, hybrid cloud and VoIP has the potential meaningfully to accelerate growth going forward both with existing and new customers. Cloud Centric Strategic revenues now represent a meaningful 43% of group revenues and represent the highest priority IT spending areas. It is our opinion that this change of emphasis/positioning is not reflected in the c. 10% FCF yield."

[value viper] 16/11/2021 10:00

HhmmAll round pretty solid - surprised we not higher reallyI know the Fishwicks own lots but would be good to see now some director buying to help the cause

[blusteradjuster] 16/11/2021 09:39

Makes something of a nonsense of the new debt facility if the market wouldn't be comfortable with them using it - until/unless EBITDA reached a point where the debt/EBITDA ratio remained below 3.

They'd need to use that debt to speedily increase EBITDA (cashflow is good but can only facilitate a certain level of growth) - which means something of a Catch-22.

I'd expect office working to increase in 2022 to a new normal - which should help those bits of the business suppressed by home-working.



In March 2021, the Company signed a new enlarged banking facility agreement with NatWest and Bank of Ireland, to support its growth ambitions. This agreement is for a three-year term, extendable by one year, and provides the Company with up to GBP70 million senior debt, comprising a GBP35 million revolving credit facility, a GBP15 million term loan, and a GBP20 million accordion facility. The commercial terms of the enlarged facility are the same as the previous existing facility.

[red ninja] 16/11/2021 09:19

Encouraging that Datrix performing so well, but market always mindful of Adept debt levels.

[blusteradjuster] 16/11/2021 07:19

Apart from “no dividend” - looks ok.

Might seem odd to pay down debt when they have so much debt available but makes sense to be prudent for now.

[red ninja] 15/11/2021 13:30

I've just re-read the AGM statement and cannot see anything too negative in it.
I've looked at the Datrix RNS and it also looks positive.
The results looked pretty reasonable.

However, ominously the share price continues to fall.
Oh well not long to wait now ...

[red ninja] 12/11/2021 09:58

Bought back in at just under 218p, which seems reasonable value, but hopefully there are no unpleasant surprises lurking.

[value viper] 11/11/2021 16:51

Little bit of caution in that AGM statement but suspect all in line - assuming so, recent price fall looks somewhat overdone - famous last words !!

[red ninja] 11/11/2021 16:37

Yes, ADT holders seem nervous ahead of Interims, however, no evidence of problems as far as I know.

[value viper] 11/11/2021 16:29

Interims next Tuesday need to reassure - big retrace here over past month

[red ninja] 06/8/2021 16:27

Back down again will it bounce on Monday or take another leg down ?

Agree its thinly traded so not a lot of trading needed to push the share price.

[blusteradjuster] 28/7/2021 08:30

They have a big credit facility buffer and throw-off cash, so, absent a BIG acquisition, there seems no need to raise cash.

It's a thinly traded share so I guess a big(gish) position needed out quick.

[irenekent] 27/7/2021 13:43

Been steadily declining for a while. Wondering what the reason is too. Is there any news of them trying to raise cash?

[red ninja] 27/7/2021 12:45

Bit of a crash today. I wonder why ?

[red ninja] 14/4/2021 11:12

N + 1 Singer

AdEPT has acquired Datrix Ltd – a London based Enterprise Managed Services provider, specialising in cloud-based networking, communications, and cyber security solutions. Key to highlight is how Datrix is a growing business (sales +8% y/y) – benefitting from its expertise in next-generation technologies, which broaden ADT’s core competencies in attractive new areas. We see how this addition is particularly attractive for larger (more complex) customers – enabling ADT to offer a more end-to-end service and consequently, realise greater ‘margin capture‘ as well. Also relevant is how >60% of Datrix‘s sales are; recurring and; generated in the Public Sector, so well aligned with ADT’s business model and market focus, for instance, it strengthens the Group’s position in e.g. Local and Central Government supplier frameworks, as well as adding new logos. All in, we see Datrix as a highly complementary acquisition, which should assist and enhance organic growth prospects. Against this, initial consideration of £9m cash, ~6x trailing (post synergy) EBITDA looks an attractive price. We update forecasts accordingly – now looking for £12.5m of EBITDA in FY22 and £7.5m of FCF (or £10.1m on a unlevered basis), the latter - equivalent to a 10% EV yield - continues to stand-out.

[red ninja] 14/4/2021 09:12

Hopefully the Datrix aquisition will work out with cross selling to the rest of the group, but must admit I've sold out of directly held ADT as put off by the rising debt exposure.

Still indirect exposure via DSM, Downing seem very keen on them so hopefully they will still come good.

[blusteradjuster] 14/4/2021 08:54

How much is that debt costing them?

The acquisition increased turnover by 8% last year - which is impressive if sustainable.

[ntv] 14/4/2021 08:44

pumped full of debt , looks a promising short at some point
Going to need a placing to get it down

[crispfin] 14/4/2021 08:28

I always feel like there is a layer of spin that you need to unpick in their RNS. More so than other companies.

The deal is £9m upfront with £7m earn out for a business that does £1.1m EBITDA but will give synergies of £0.4m so a synergy adjusted EBITDA of £1.5m.

Synergies are mgmt estimate only - remains to be seen if these will be delivered but I’ll give benefit of the doubt for now.

Clearly a lot rides on the structure of the earn out. I posted a while back that my concern was around ability to do good acquisitions.

In my day job in M&A, I know that competition for these types of targets is red hot and pricing is moving north. A well advised vendor should be able to drive decent terms on earn outs etc.

This acquisition could end up being c.10x synergy adjusted EBITDA - pretty frothy for a small bolt on. Equally though with no earn out it drops to c.6x so it’s pretty key to see how that falls.

It’s not hard to buy businesses - it is hard to buy good ones at reasonable prices.

I originally invested because I wanted to see more bolt ons done at 5-6x EBITDA and the business to delever a bit. In the last week it’s taken on more leverage and done a potentially pricey acquisition!

I’ll be waiting another 18 months to see how this deal plays out. I don’t know enough to really understand the strategic benefits they say exist.

Things are moving in a different direction to where I wanted them to go so it definitely needs watching.

[wiganer] 14/4/2021 07:39

Yes, it was.

[jojaken] 14/4/2021 07:11

So that's £9m in the first year, which will be earning enhancing, and then another £7m depending on performance. ( I note no comment about it earnings enhancement after the second payment ) £16m in total looks expensive for relatively little profit.