Castleton to buy Documotive for 4m
 
Thu, 30th October 2014
 
 

Castleton to buy Documotive for £4m

Documotive, a software supplier to the social housing sector, is to be acquired by Castleton Technology in a deal worth £4m.

Castleton, based in Cambridge, has agreed to pay £3m in cash and £1m of zero coupon convertible loan notes. The deal will be funded by a £5.5m share placing, which is backed by £1.2m from MXC Capital.

"The acquisition of Documotive is an important further step in our strategy to build out a public sector focused managed services and software business," said Ian Smith, chief executive of Castleton.

"The business fits well with Montal, our specialist outsourced managed services business, also focused on the public sector. We see a great opportunity to provide technology support to the fragmented and under invested public sector and we are actively pursuing further complementary investment opportunities."

For the year to 31 October 2014 Documotive is expected to post a turnover of £3.2m and EBITDA of £800,000. The business was founded in 2007 to address opportunities to provide software to the social housing sector.

The founders of the business are selling Documotive in order to focus on a newly developed software application, Agile, which they will do with financial investment and support from MXC Capital.

A term of the acquisition agreement is that the business assets of Agile have been hived out of Documotive and acquired by 365 Agile Ltd.

MXC Capital Advisory acted as sole financial adviser to Castleton.

 
 
category Central and East  |  source Insider Media