CTG, an information technology solutions and services company, acquired Paris-based SOFT COMPANY, a consulting and engineering company. KeyBank agented a $45 million senior secured revolving facility to support the purchase.
Highlights of the transaction include:
- The addition of approximately $30 million in annualized revenue
- The extension of an established European presence into the growing $40 billion IT services market in France
- Significant cross-selling opportunities across a combined client base
- The expansion of existing offerings with highly complementary services and value-add solutions, including business intelligence and analytics, as well as mobile application development
- Growth and margin expansion opportunities with greater scale
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“The acquisition of SOFT COMPANY is a significant milestone in CTG’s growth strategy as it expands our portfolio of services and opens up an important new and growing market in France,” said Bud Crumlish, CTG president and CEO.
The all-cash transaction is valued at $16.5 million, not including potential future earnouts, for SOFT COMPANY’s approximately $30 million in annualized revenue and approximately $3.5 million of cash and cash equivalents as of December 31, 2017. Excluding customary acquisition-related expenses, the transaction is expected to be immediately accretive to CTG’s operating margin and earnings per share. CTG funded the purchase price of the acquisition through a combination of cash on hand and a drawdown of capital from the company’s recently expanded three-year revolving credit facility. The boards of directors of both companies unanimously approved the transaction, and the acquisition was not subject to any regulatory approvals.
