Software firm acquires digital specialist
Castleton Technology, the software and managed services provider to the public and not-for-profit sectors, has acquired Deeplake Digital in a £1.8m deal.
Deeplake Digital provides digital technology for landlord and tenant communication, specifically in the social housing sector, via SMS, e-mail and social media platforms using its own proprietary software.
Deeplake Digital has relationships with more than 90 housing associations, and the acquisition will add 60 additional annual contracts with existing Castleton customers and 30 annual contracts with new customer names to Castleton which will increase the opportunity for Sutton-Coldfield-based Castleton to cross-sell its other products to the enlarged customer base.
The acquisition will add annualised revenue of £800,000, of which 80% is recurring in nature, and normalised EBITDA of £300,000 based on the year to 30 June 2018.
The acquisition is expected to be earnings enhancing in the next full financial year to 31 March
Dean Dickinson, chief executive of Castleton, said: “This strategic acquisition enables us to capitalise on the significant opportunities within the social housing market’s ongoing market shift towards digitalisation, building on the capabilities that the group has already successfully developed.
“Deeplake Digital adds scale, customers, skills, market knowledge and specific digital communication intellectual property and has a great reputation for delivering a quality product and service, evidenced by its high customer retention levels over the past ten years. This acquisition provides additional cross-selling opportunities into Deeplake Digital’s customer base, in line with the group’s growth strategy.”