LONDON (ShareCast) - (ShareCast News) - Servelec Group has acquired Tribal Group's Synergy children's services management information system business for of £20.25m cash, which it is part-funding with a new bank facility.
Using the proceeds to reduce net debt, Tribal, which issued two profit warnings late last year, said the deal would reduce its scheduled rights issue to £21m from the £30m proposed in December.

The deal requires approval of Tribal's shareholders and will see the business purchased on a debt-free cash-free, with the transfer of 63 skilled staff, contracts and maintenance agreements and a property lease on an existing premises.

Synergy's suite of software products, which has been implemented in over 100 local authorities in England and Wales, helps the local authorities manage information within children's services such as education, safeguarding and children's centres.

In calendar 2015 the business recorded revenues of £6.3m, contributing an operating profit and a profit before tax of £2.7m.

Servelec chief executive Alan Stubbs said the acquisition was another step to capitalise on the growth opportunities offered by the government's Converged Care plans.

"Building on a strong year for Servelec's Social Care business, driven by the successful acquisition and integration of Corelogic, Synergy will allow our combined Local Government clients to improve child care by having a single view of a child's needs. It strengthens the suite of products available to new and existing customers and fits within our strategy of acquiring complementary businesses that will provide both short-term and long-term benefit to the group as a whole," he said.

Tribal said after using the proceeds to reduce net debt, the disposal will also strengthen its focus on a core business centred around the management of universities, colleges and schools.

Chief executive Ian Bowles added: "This, together with the intended rights issue, will restore the group's balance sheet, and enable the management team to take the business forward in its domestic and international markets."

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