Telecommunications infrastructure company Leadcom Integrated Solutions Ltd. (AIM: LEAD) will acquire full ownership of French telecommunications infrastructure provider Ytelcom for a total of $17-18 million. The company said it would pay $15 million on the closure of the deal and the rest in March 2008 subject to Ytelcom's performance in 2007.
Ytelcom is a privately owned French group, established in 1967, which operates in Francophone countries in West Africa. Ytelcom provides similar services to Leadcom, including extensive consulting and project management services, network planning and design, installation and commissioning of telecom and peripheral equipment, civil engineering and supply and assembly of infrastructure elements (towers and shelters). The company posted €44.2 million ($55.5 million) revenue for 2006.
Leadcom said that Ytelcom would help it shorten its time-to-market thanks to its operations in countries in which it does not have a presence. Ytelcom's owner will provide consultancy services to Leadcom during the transition period following the completion of the acquisition, to ensure the smooth fusion of Ytelcom into Leadcom's group of companies.
Leadcom updated its guidance following the acquisition, and expects revenue to increase by 36% to $83 million for the first half of the year, compared with $61 million in the first half of 2006. The company's cash flow from operations is expected to exceed $3 million in the first half of 2007.
Leadcom CEO Arik Alcalay said, "Leadcom is constantly looking for the optimal use of its funds at hand, focusing on our shareholders' return on investment and the healthy growth of the company. Ytelcom operates in markets that are complementary to Leadcom, and by this acquisition, we will achieve a significantly wider geographical spread on the African continent. This transaction fits into the strategic blended growth model we announced earlier this year."
Published by Globes [online], Israel business news - www.globes.co.il - on June 28, 2007
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