LONDON: Northamber Plc (AIM:NAR), a leading value-add AV & IT distributor, has acquired Tempura Technology Limited (TTL) and Tempura Communications Limited (TCL) together with their respective subsidiaries.
Tempura is a value-add distributor of unified communications including VoIP, connectivity, audio visual and video conferencing solutions in the UK, Ireland and the BeNeLux.
The total consideration for the acquisition is up to £6.02 million in cash and, subject to the passing of the Resolutions and Admission, the issue and allotment to the Matthew Light (the Seller), of 181,818 ordinary shares of 1 pence each in the capital of the Northamber Plc.
The board of directors of Northamber believe that the Tempura business is scalable with potential for strong organic growth. Tempura has a diverse client base across varying business and sectors; while subsidiaries in Ireland and the Netherlands broadens Northamber’s reach beyond the current UK focus; this will be particularly valuable in a post Brexit environment to allow Northamber to better support customers with project roll outs
Total consideration of up to £6.02 million, comprises £3.28 million in cash paid on completion of the acquisition, £0.1 million through the issue of 181,818 Ordinary Shares at an issue price of 55 pence per consideration share. The consideration shares will be subject to a 36 month lock in period during which the Consideration Shares cannot be sold or transferred other than in respect of typical carve outs.
Performance based contingent consideration of up to a maximum of £2.64 million, based on the EBITDA for three financial periods ending 30 June 2025, 2026 and 2027. If it becomes due, the Contingent Consideration will be paid in three instalments with the final payment due to be made following completion of the audit of the enlarged group’s accounts for the financial year ended 30 June 2027.
The Company has secured new financing facilities from its bankers Barclaysand the Initial Cash Consideration will be funded from Northamber’s existing available cash and the new facilities. The Company anticipates that the Contingent Consideration will be paid in the same way.
Following the Acquisition, the Tempura businesses will become wholly owned subsidiaries of the Company.
Matthew Light has agreed to continue with the business to assist initially with the integration of Tempura into the Northamber group and thereafter to drive growth in the Company’s combined Unified Communications offering.
Tempura Communications Ltd, operating within the UK for over 20 years, provides traditional distribution routes to market with value added reseller partners across the country and is the parent company of Tempura Communications Ireland Ltd, and Tempura Communications B.V. based in Dublin Ireland, and Oosterhout in Netherlands respectively. Tempura Ireland is now over 10 years old is focussed on the same portfolio specifically for Repuplic of Ireland market, with Tempura BV providing simplified deployment to UK resellers working with UK customers with overseas requirements in Europe as well as providing the same products and service categories as with the UK and Ireland to the Benelux based reseller community.
Tempura Technology Ltd, the parent company for Tempura Connect Ltd, was incorporated with its sole purpose in providing resellers with alternative billing options such as white labelled or contracted invoicing, DirectDebit payment processing and financial services such as asset leasing for their customers.
Based on unaudited management accounts, for the year ended 30 June 2023, Tempura had revenues of £14.61 million, EBITDA of £0.96 million and profits before tax of £0.81 million; net assets were £3.02 million. Similarly, for the 6 months ended 31 December, Tempura had revenues of £6.11 million, EBITDA of £0.91 million and profits before tax of £0.81 million; net assets were £3.78 million.
Alex Phillips, Executive Chariman of Northamber, commented: “We are delighted to welcome Matthew and the Tempura team into the Northamber group. Over the last 20 years they have established a very strong reputation for consistently delivering high-quality services and solutions greatly valued by customers.
We are excited by the opportunities that lay ahead as we continue to invest in profitable growth and offer our unique brand of services across the broadening customer base of the business, including particularly in international markets.
The Board believes that there is significant opportunity for further suitable acquisitions in the sector, which should generate additional value for Northamber’s shareholders in the medium term.”
Matthew Light, Managing Director of Tempura, stated: “We see a great many synergies with Northamber, including its culture, products and services and I am pleased to be joining the senior management team of a founder friendly business and to become a shareholder in Northamber.
By becoming part of the Northamber group, we will be able to reinforce and broaden our offering to existing and new customers, driving growth of both Tempura and the current Northamber business, together with continued gross margin improvement, aided through shared best practices and general economies of scale linked by a common ethos and goal focused around service.”
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