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COA Solutions acquired by healthcare specialist ACS

12th Feb 2010
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The acquisitive financial and business software house COA Solutions has itself been bought for £100m by Advanced Computer Software PLC, a specialist supplier of software and services to the healthcare sector.

COA Solutions was assembled through a series of deals engineered by venture capitalist Alchemy Partners that included Cedar accounts, parts of Walker International, OpenAccounts and document management specialist Version One. Its portfolio includes products and services to support business intelligence (including patient pathways), compliance, billing, HR, payroll, procurement and business process outsourcing (BPO).

ACS's acquisition statement explained that with 5,000 customers, the COA has a strong presence in healthcare and emergency services, with expertise in mobile applications, e-procurement and exspenditure analysis that will give ACS a bridge from its base in the primary care market into NHS acute sectors. As well creating “substantial opportunities” for ACS to cross-sell existing healthcare products into new markets, ACS chief executive Vin Murria commented, “Many of our existing healthcare clients could benefit from management tools in the COA product suite.”

COA’s revenues were £59.8m in the year to 31 March 2009, with earnings before interest, tax etc of £12.3m. The acquisition should push ACS revenues to around £90m for the year to 28 February 2010, with EBITDA predicted to be around £21m. The £100m cash deal is being funded by £55m in new bank facilities over 3.5 years from HSBC and Royal Bank of Scotland, ACS said.

While the logic behind the COA acquisition is impeccable, there are a few curious features about it. The relative size of the buyer and acquired company for a start, which may be down to their relative profitability and cash generating characteristics. But the recent departure of managing partner Jon Moulton from Alchemy Partners may have played a part in the decision to sell. As an accountant as well as a legendary turnaround guru, Moulton had a very good feel for the business software market and took a close interest in the COA project. Perhaps his fellow Alchemy partners did not share his enthusiasm, or saw the ACS offer as an opportunity to make a timely and profitable exit.

In another twist, Vin Murria was previously chief executive at Computer Services Group, which was acquired by IRIS in 2007. Her latest move now puts her in direct competition with her former employer in the fast-consolidating business software market – providing plenty of grist for the City gossip mill.


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