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RealTime IT News

Compel Acquires Net Design and Solutions Company

IT services company Compel Group this week acquired Pangaea, a provider of Web design and Internet-based solutions to major U.K. corporations.

The terms of the takeover are that Compel will pay a total of £10.5 million ($17.01 million), of which £2.5 million ($4.05 million) becomes due immediately. The initial payment will consist of £1.75 million ($2.84 million) in cash and £0.75 million ($1.21 million) in Compel shares.

A highly profitable company, Pangaea made a profit before tax of £571,670 (approx. $926,000) on a turnover of £1,254,108 (just over $2 million) in the year ended September 30, 1999. Very few Internet-related firms in the U.K. can boast a comparable profit-to-turnover ratio.

Pangaea will continue to trade independently under the name Compelreach.

"Compel's existing businesses are increasingly addressing opportunities created by the growing importance of the internet and e-commerce," said Neville Davis, chairman and chief executive of Compel.

"The acquisition of Pangaea broadens further our range of services in this area; we are finding that UK corporates are turning to companies like Pangaea for services such as Web site design and browser/multimedia technology based communications and we will now be able to offer these from within the Compel Group."

Compel's acquisition of Pangaea is conditional on the admission of the initial consideration shares to the London Stock Exchange's Official List. Compel has applied for the admission of 164,817 ordinary shares of 5p each which it has issued to the vendors of Pangaea.

Compel also reported that it has recently secured new business contracts that could generate over £200 million ($324 million) over the next four years.

The deals include two projects with major city financial institutions, with Siemens for supplying desktop technology, and an outsourcing contract with a northern industrial services company.