Grant Thornton advises on communications deal

GRANT Thornton’s Midlands corporate finance team has successfully advised the shareholders of Scalable Communications plc on its sale to Alternative Networks plc, one the UK’s leading business communications service providers.

Scalable is a computer network integrator which specialises in delivering converged solutions around IP network, IP security and IP telephony. The transaction was structured as an initial payment of £7.5m plus an estimated £2.5m payable on achieving Scalable’s growth targets to December 31, 2011.

Scalable, which employs 53 people at its offices in Buckinghamshire and the City of London, advises on and supplies data network and switching equipment and services, network security, IP telephone networks, and business continuity solutions. Its key partners are Extreme, Mitel, and Juniper.

The firm has invested in a network operating centre (NOC) from which it monitors, maintains and supports customers’ network infrastructure throughout the UK. It has grown strongly through the economic downturn, with annual sales of £12.5m in 2009.

The acquisition will provide Alternative with a platform on which to grow its managed data networking services into its customer base as well as the wider market.

Grant Thornton was retained by the founding shareholders of Scalable, Simon Brown and Denny Meijer, to advise them on their options following an initial approach by Alternative.

Martyn Pilley, who led the Grant Thornton team, said: “Despite continuing to grow strongly through the recession, the shareholders of Scalable were naturally cautious about committing their time to a transaction process that might not ultimately meet their expectations.

“We were therefore asked to advise on the value of the business, the potential structure of a transaction and the likelihood of completing a deal in the current market. By recognising the strategic fit between the businesses we were able to assist in presenting the potential benefits of the acquisition to Alternative and then led negotiations on behalf of the Scalable shareholders, managing the transaction process through due diligence and legal contract.”  

Grant Thornton also provided tax advice to the Scalable shareholders while legal advice was provided by Michael Stace, of the Oxford office of Morgan Cole.