Recently-listed IT company Cirrus Networks has bought Amcom L7 Solutions for a knock-down price of $500,000, four years after current Cirrus directors Andrew Milner and Matthew Sullivan sold the business for $15 million.
Recently-listed IT company Cirrus Networks has bought Amcom L7 Solutions for a knock-down price of $500,000, four years after current Cirrus directors Andrew Milner and Matthew Sullivan, along with other L7 shareholders, sold the business for $15 million.
L7 appears to have deteriorated during its four years of corporate ownership.
In 2011 when it was sold to Amcom, it had annual revenue of $40 million and 130 staff and was expected to generate EBITDA of at least $4 million in the year to June 2013.
Vocus said today that L7’s annual revenue had dropped to $28 million and that it made a “small contribution” to Amcom’s EBITDA in the year to June 2015.
The acquisition will provide a big boost to the scale of Cirrus Networks’ operations.
After being established by managing director Frank Richmond in 2013, Cirrus posted revenue of $14.9 million in the year to June 2015.
It listed on the ASX in July, after a reverse takeover of Liberty Resources and a $5 million capital raising.
Cirrus said in a statement it was excited about having the opportunity to revitalise the L7 business, which it said has experienced a steady decline over recent years.
L7 Solutions was established in 2004.
Key players in its establishment were Mr Milner, who is Cirrus chairman, Mr Sullivan, who is a Cirrus non-executive director, and Stott + Hoare managing director Jim Loader, who was the largest shareholder.
Mr Sullivan, whop is a 40under40 award winner, was chief executive until the 2011 sale.