Gamma Communications completes acquisition of STARFACE
Why we think this is good
The acquisition of STARFACE is a strategic move that aligns with Gamma's growth plans in the DACH region and cloud communication services. The successful completion of the acquisition, following the previous announcement, suggests that Gamma has navigated the regulatory approval process effectively. The financial details provided, including the cash outlay and funding sources, indicate that Gamma has the resources to support the integration and growth of STARFACE. The CEO's positive commentary on the acquisition's potential to drive future growth is a positive signal, though the actual financial and operational impact remains to be seen. The current share price decline may reflect broader market conditions or concerns not directly addressed in the RNS, and the positive broker targets suggest the market may be undervaluing Gamma's potential.
Key Points
- Gamma Communications has completed the acquisition of 100% of the equity of SF Technologies Holding GmbH (trading as STARFACE)
- STARFACE is a market leader in proprietary business communication and collaboration software solutions tailored to the German market
- The cash outlay for the acquisition (excluding transaction costs) was €201.6m, which equates to €196m (£164m) on a cash-free, debt-free basis
- The acquisition was funded through a combination of Gamma's new Revolving Credit Facility (£30m) and existing cash resources
- The CEO, Andrew Belshaw, stated that the acquisition marks the beginning of an exciting new chapter, allowing Gamma to accelerate cloud adoption and innovation across the DACH region
Summary
Gamma Communications plc has completed the acquisition of 100% of the equity of SF Technologies Holding GmbH (trading as STARFACE), a market leader in proprietary business communication and collaboration software solutions tailored to the German market. The cash outlay for the acquisition (excluding transaction costs) was €201.6m, which equates to €196m (£164m) on a cash-free, debt-free basis. The acquisition was funded through a combination of Gamma's new Revolving Credit Facility (£30m) and existing cash resources. The CEO, Andrew Belshaw, stated that the acquisition marks the beginning of an exciting new chapter, allowing Gamma to accelerate cloud adoption and innovation across the DACH region. The broker targets indicate a positive outlook, with multiple "Buy" recommendations and price targets significantly higher than the current share price.