The acquisition is expected to strengthen Global Capacity’s position as the first global telecom logistics provider.
Moreover, VDUL’s software and intellectual property will also strengthen Global Capacity’s proprietary tools and intellectual property – the core of the company’s business model.
Global Capacity’s Strategic Sourcing business will also immediately benefit from the strong base of recurring revenue customers that VDUL contributes. In addition, Global Capacity’s Software-as-a-Service (SaaS (News
)) business will add VDUL’s software capabilities and customers, adding scale and revenue to the company’s base of predictable revenue.
“We are extremely thankful to our banker, Capstone (News
) Investments, and to all of our investors who helped us secure the financing for this acquisition,” said Patrick Shutt, chief executives officer of Global Capacity, in a statement.
“In this extraordinarily challenging credit market, it would have been impossible to get this transaction closed without their perseverance and commitment. Their support is a strong endorsement of the unique value we have in the market, and this transaction is a testament to their professionalism,” he added.
VDUL generated trailing 12-month revenues of approximately $50 million, with gross margins of 25 percent, and adjusted EBITDA of $3 million for that period. Consolidated annualized predictable revenues for the combined companies should total roughly $72 million on a forward twelve-month basis.
Global Capacity expects that execution of its integration plan will increase adjusted EBITDA to a twelve-month range of $10 to $12 million for the predictable revenue business. The company also expects non-predictable revenue from its Optimization business to grow to 30 percent of total annualized revenue.
Shutt said that in the current economic climate, reducing network costs is critically important for the clients. The addition of VDUL would strengthen product portfolio and further extends the compnay’s ability to help clients drive cost out of their network spend.
“In addition, our strengthened base of predictable revenue provides us with a strong platform for growth, and gives us the ability to focus on realizing the tremendous upside potential of our non-recurring Optimization Solutions business,” he said.
Capital Growth Systems (News
), dba Global Capacity provides a fully-integrated telecommunications supply chain management system that streamlines and accelerates the process of designing, building, and managing customized communications networks. It offers a comprehensive suite of services to enterprises, systems integrators, and carrier customers worldwide.
Anil Sharma is a contributing editor for TMCnet. To read more of Anil's articles, please visit his columnist page.
Edited by Michelle Robart