Mayfair-backed GCI to acquire Nasstar for £79.4m

The offer price of 12.88 pence per share represents a premium of approximately 14.5% on the unaffected closing price of 11.25 pence per share on 16 December 2019.

Mayfair drew equity from its second-generation fund to support the acquisition. Mayfair Equity Partners II closed on £650m in January 2019.

Divitias Bidco, which acquired GCI Managed Services from BGF in May 2018, will also acquire Nasstar. Unquote understands the target deal value for GCI was £200m, with Mayfair investing £60m in extra equity. Private debt firm Arcmont will own 10% of the Divitias holdco following the transaction.

Mayfair expects GCI and Nasstar to benefit from synergies such as increased purchasing power, deeper technical expertise, broader products and service offerings, and wider cross-selling opportunities across an expanded customer base.

The bidders have received undertakings from shareholders representing 28.4% of shares to accept the bid. Shareholders include Kestrel, Redwood Kids Trust and Brownwood.

The deal is expected to close in late January 2020.

Previous funding
The company listed on the AIM segment of the London stock exchange in 2005. It acquired e-know.net in a reverse takeover in January 2014, Kamanchi in July 2014, Vesk in October 2015 and Modrus in September 2016.

Company
Nasstar, which was founded in 1998, has regional offices in Northampton, Bournemouth and Auckland, New Zealand, as well as its headquarters in Telford. It provides hosted managed services and cloud computing services, integrating private and public clouds. The company generated EBITDA of £5.2m from revenues of £25.7m in 2018. EBITDA for 2017 was £4.8m from revenues of £24.1m.

Advisers
Equity – Investec (corporate finance); CMS (legal).
Company – Marriott Harrison (legal).
Management – Oakley Advisory (corporate finance); FinnCap (corporate finance).

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