Atturra ASX ATA acquisition Cirrus Network CNW
September 18, 2023
Atturra proposes $49m strategic acquisition of Cirrus Networks

Technology and business consultancy Atturra (ASX: ATA) has made moves to acquire managed service and information technology solutions provider Cirrus Networks Holdings (ASX: CNW) for approximately $49.3 million.

Under the terms of the proposed deal, Cirrus shareholders will be granted consideration to the value of $0.053 per share, representing a 29.3% premium to Cirrus’ last closing price and a premium of 25.5% based on the 30-day volume weighted average price.

They will be given the opportunity to elect their consideration as either 100% cash, 50% cash and 50% shares or 100% shares.

Cirrus shareholders who do not make an election or who make an invalid election will receive the default consideration of 75% cash and 25% shares.

The maximum total cash consideration payable by Atturra has been set at $37.5 million, while the maximum total Atturra share consideration is not to exceed 13.98 million shares.

The board of Cirrus has recommended that shareholders vote in favour of the proposed acquisition.

Each Cirrus director has expressed an intention to vote their shares in favour of the scheme.

Strategic fit

Atturra said the Cirrus acquisition would be carried out through subsidiary firm Atturra Holdings and represents a strategic fit for the company which further expands its recurring managed services expertise.

Cirrus will provide Atturra with an expanded presence in the Australian Capital Territory, Western Australia and Victoria and a larger government and enterprise customer base.

The increased scale will be transformative to Atturra’s managed services offering and will facilitate the delivery of highly-recurring, multi-year services across the new client base.

Locally-owned companies

Atturra and Cirrus are two of a few remaining independent, locally-owned information and communications technology (ICT) services companies in Australia.

Combining the strengths of both companies and remaining a sovereign entity will provide Atturra with a key competitive advantage.

The acquisition is expected to complement Atturra’s $15 million acquisition in March of The Somerville Group, which is an Australian managed services provider to the corporate and education sectors.

Transaction funding

The Cirrus transaction will be funded by the issue of new Atturra shares, a three-year senior debt facility, Atturra’s acquisition facility with Westpac and existing cash on hand.

Funding has been structured to maintain Atturra’s balance sheet flexibility and allows the company to continue pursuing organic and inorganic growth opportunities.

The acquisition is expected to be “high single digit earnings per share accretive” to Atturra shareholders in the 2024 financial year on a pro forma and normalised basis (excluding any one-off transaction or integration costs and with a conservative assessment of anticipated synergies).

Positive step

Atturra chief executive officer Stephen Kowal said the acquisition of Cirrus would be a positive step towards the company’s vision of becoming Australia’s leading advisory and IT solutions provider.

“This acquisition has strong strategic and cultural alignment with our industry and service offerings and will significantly expand our recurring managed service capabilities,” he said.

“Cirrus has a wealth of expertise having serviced some of the leading names in the government and resources industries [and it will] enhance our ability to become a market leader in these sectors.”

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