Software group Sanderson expands with £0.6m e-commerce acquisition

SOFTWARE and IT services group Sanderson has expanded with the £600,000 acquisition of a Midlands-based e-commerce firm.

Sanderson, which serves the multi-channel retail and manufacturing markets in the UK and Ireland, has acquired Catan Marketing Ltd in a deal worth a maximum of £644,660.  The cash deal comprises an initial payment of £500,000 on completion with an additional £49,660 due October 2013. A further payment of £95,000 is dependent on certain performance criteria being met by the end of August 2014.
 
Catan, based in Rugby, provides e-commerce solutions under the ‘Priam’ trading name to over 30 multi-channel retailers.  For the year ended August 31, 2012, Catan achieved a pre-tax profit of £27,000 (2011: £69,000) on revenue of £895,000 (2011: £1,160,000).  At the date of acquisition, Catan had net assets of approximately £50,000.  
 
Sanderson, which said the acquisition could be the first in a number of new deals, added it was also continuing to trade well in the second half of the financial year and performance was expected to be in line with market forecasts.  It said there were some early signs of improving general economic conditions and this should assist future organic growth.
 
Commenting on the acquisition, Christopher Winn, Sanderson chairman, said: “Over the next few months, the business will be fully integrated into our multi-channel retail division.  Although relatively small in size, this is very much a complementary acquisition in terms of its products and customers, and augments the group’s existing multi-channel retail business.  

“We are actively considering a number of further acquisition opportunities, especially in the multi-channel retail market, but will continue to adopt a cautious approach, remaining focused on organic growth, cash generation and maintaining a strong balance sheet.”