ACS buys hosting and outsourcing firm

Advanced Computer Software, the owners of out of-hours software provider Adastra, has bought a hosting and outsourcing firm to accelerate its roll-out of hosted software services.

ACS has acquired Business Systems Group for £15.5m. The company said the acquisition would enable it to provide hosting, managed services and outsourcing capabilities to its customers across primary care.

Vin Murria, chief executive officer of ACS, told EHI Primary Care that Adastra was facing increasing demand for hosting solutions, which the purchase of BSG would help it meet.

“We decided to buy it rather than build it,” she said, “because that will allow us to get where we want to go quicker.”

ACS said the acquisition will allow for the expansion and faster roll out of its core products for out-of-hours care, walk-in centres, polyclinics and urgent care centres, and for the rapid roll-out of its iNurse and end of life applications launched earlier this month.

Murria explained: “ACS has progressively moved to providing hosting services to its out-of-hours customers and the acquisition of BSG will provide greater bandwidth to drive this process more effectively.

She added: “The board of ACS is looking forward to working with the BSG team to deliver the cross selling opportunities and synergies that have already been identified.”

BSG is a hosting and outsourcing business with customers including not-for-profit and corporate organisations and ACS said it hoped it would also be able to expand into the market for comparison analytical tools including business intelligence and data warehousing.

Murria, who is also chairman of BSG, said the deal was good news for ACS because although it had paid £15.5m for the company, BSG had £9.3m cash in the bank so the effective cost was £6m of which only £2.5m was paid in cash with the rest in equity.

ASC acquired Adastra in August last year for £13.2m and last month announced that it made profits of £2.6m in the six months to February 2009 and £1.1m in the previous six months; a 142% year on year increase.

ASC said it had £14.7m cash in hand and its goal was to be the leading consolidator of software and services to the primary care market. It has identified more than 100 possible targets for acquisition including software companies for GP practices and community services.

Murria told EHI Primary Care: “I’ve been involved in 18 acquisitions over the last five years and I don’t expect to stop now.”

She said the company’s focus was on technology in the primary care, domiciliary care and social care markets and that it was only interested in companies with high levels of recurring revenues.

She added: “What we do is help companies to focus on their core competencies and make companies that at very good at what they do become fantastic.”

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