Sepura targets TETRA in the round following 3T acquisition

Sepura, the quoted Cambridge company that makes TETRA digital radio handsets, is taking a holistic approach, having acquired an Austrian TETRA infrastructure company for up to €13m (£10.36m).

Sepura will pay €8m in cash up front for 3T Communications and a possible further €5m dependent on earnings targets being met.

In a regulatory news announcement about the deal Sepura said: “The combination of Sepura's market leading radio portfolio with 3T's comprehensive infrastructure offering enables customers to procure an entire critical communications solution from a single supplier.”

While Sepura is best known for supplying handsets to the ‘public safety’ market - emergency services and military, for example - 3T will give the company access to the commercial sector, the fastest growing TETRA market. Sepura is also relishing the prospect of expanding 3T’s current customer base beyond Europe. 3T’s customers include Shell, Bayer and BMW.

Vienna-based 3T’s business model, which sees it generate revenues over a multi-year cycle would also improve Sepura’s base of recurring revenues, the company said.

3T generated revenues of €12 million for the year ended 31 December 2011, with adjusted EBITDA of €1.3 million and profit before tax of €0.4m.  The acquisition is on a cash-free and debt-free basis and will be funded from Sepura’s cash pile and the partial use of a previously untapped debt facility with Barclays, while up to €1m of the deferred consideration will be payable in Sepura shares.

Gordon Watling, CEO of Sepura said: "We have an excellent understanding of 3T's products and management team through our existing long term partnership, and are excited to be able to meet the increasing demand from our growing commercial customer base for an end-to-end TETRA solution."

 

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