Megabuyte - Technology sector intelligence

Airwave’s growth yet to justify £1.9bn price tag

We initiate coverage on Airwave, the private equity-owned business that provides ‘blue light’ public radio services for the police, fire, ambulance and other organizations, and will be supporting the 2012 London Olympics.  Since being bought out of mobile operator O2 in 2007 for £1.9bn, the company has increased monthly revenues by 61%, and recorded revenues and EBITDA of £380m and £171m respectively in the year to June 2009.   Despite this strong performance, the 2007 price tag of £1.9bn still looks a better deal for O2/Telefonica than for Macquarie. Premium subscribers can read our full initiation note here.

Amor Group strives for its half century

We also initiate coverage today on Scottish IT services company Amor Group which was formed by the merger and simultaneous buy-out from Sword Group of Pragma Systems and Real Time Engineering. Both companies had been acquired by Euronext listed Sword in the mid noughties but, as part of a refocus on its product business, the two companies became non-core. The buyout was led by CEO John Innes with funding from Growth Capital Partners at an enterprise value of £30m. Premium subscribers can read our full initiation note here.

Goodbye WIN, and thoughts on industry consolidation

Having limped across the 50% threshold to make its offer unconditional in early/mid August, IMImobile has now achieved acceptances on 97% of WIN shares, which means that it can compulsorily acquire the remaining shares and remove WIN from our screens for ever.  Given other recent deals in the sector, and private equity interest in WIN, further deals are likely in the mobile content and messaging space. See Newswire Plus for more. Premium Plus readers can see our commentary on the bid battle as it happened here.

Parseq acquires Avance; shifts centre of gravity further towards BPO

BPO and Internet banking software provider to financial services institutions Parseq (formerly Intelligent Environments) has acquired the assets and contracts of Avance which provides customer relationship and credit management outsourcing. There is cash consideration of £0.5m and, in addition, acquired liabilities, integration costs and working capital requirements will cost Parseq another £2.7m. Read more in Newswire Plus.

Sopheon returns to growth in H1

Product lifecycle management software vendor Sopheon has reported a much improved performance in the first half. H1 revenues increased to £4.7m from £4.1m in H1 2009 and the company reported an EBITDA profit of £0.6m compared to a loss of £0.3m in 2009. Importantly, full year revenue visibility is up sharply to £8.2m from £6.0m in mid-June helped by a total of 24 new licence sales since the turn of the year. Sopheon was also cash generative in the period and net cash at the end of June stood at £1.7m.