Restore Acquires Document Management Firm Synertec for £22m
Why we think this is good
The acquisition of Synertec is a positive strategic move for Restore, as it broadens the company's service offering and provides an opportunity for growth. The financial details suggest the deal is earnings accretive, with Synertec expected to contribute around £28m in core revenue and £5.5m in adjusted operating profit. While there are some execution risks and industry competition to consider, the acquisition appears well-funded and the Synertec management team will remain in place, mitigating integration challenges.
Key Points
- Restore acquires document management firm Synertec for £22m initial cash consideration
- Synertec expects revenue of around £70m and adjusted operating profit of £5.5m for the 12 months ended 31 March 2025
- Acquisition is expected to be immediately earnings enhancing
- Funded from Restore's existing borrowing facilities, no shareholder dilution
- Broadens Restore's service offering and provides growth opportunity
Summary
Restore plc has announced the acquisition of Synertec (Holdings) Ltd, a UK market leader in document solutions and processes, for an initial cash consideration of £22m plus deferred payments based on future profits. Synertec expects revenue of around £70m and adjusted operating profit of £5.5m for the 12 months ended 31 March 2025, representing a significant opportunity relative to Restore's £296.58m market cap. The acquisition is expected to be immediately earnings enhancing and is being funded from Restore's existing borrowing facilities, with no shareholder dilution. While there are some execution risks and industry competition to consider, the deal broadens Restore's service offering and provides an attractive growth platform.