Advanced Computer Software, the parent of Adastra, has acquired Redac Holdings, owner of business software provider COA Solutions, for £100m.
The deal is the biggest yet by ACS, and extends the focus of the company beyond primary and community care.
COA specialises in business software to the health and public sectors. With the NHS, public sector and non-for-profit sectors accounting for approximately £30m of annual sales.
COA’s software products include: accounting and budgeting, business and intelligence and data analysis, HR, payroll, procurement, document management and business process outsourcing (BPO) services.
The current COA customer base is said to include 200 of the 240 NHS acute trusts. In addition, the company provides BPO and hosting of 66 NHS customers across 100 NHS sites.
The acquisition positions ACS, which has previously focused on the primary healthcare sector, to benefit from projected growth in business process and IT outsourcing by the wider health service, now required to achieve deep budget savings of up to £15 billion over the next three years.
Vin Murria, ACS Group chief executive said: "This is an excellent earnings-enhancing acquisition that significantly strengthens our position in the healthcare and public sector markets. It also brings us direct engagement with senior decision makers who need to deliver the kinds of efficiency savings that our combined product set can offer.”
Murria added: “There are substantial opportunities to cross sell our existing healthcare products into new markets while many of our existing healthcare clients could benefit from management tools in the COA product suite.”
The transaction is being financed through ACS’s cash resources and new bank debt. In the 12 months to March 2009, COA had revenue of £59.8m. ACS says the acquisition will be immediately earnings enhancing and highly cash generative with strong recurring revenues.
Since its creation in August 2008, ACS has acquired and integrated five companies: Adastra, BSG, StaffPlan, Healthy Software and Oak Labs India.