Atturra to Acquire Cirrus in Strategic IT Deal

Atturra Limited (ASX: ATA), a leading advisory and technology services firm, is set to acquire Cirrus Networks Holdings Limited, a prominent managed services and IT solutions provider, through a Scheme of Arrangement. This significant acquisition holds several key highlights:

Source – Kapitales Research

• Strategic Move: Atturra Limited and its subsidiary Atturra Holdings Pty Ltd have signed a binding Scheme Implementation Deed (SID) with Cirrus Networks Holdings Limited. This agreement will result in Atturra Holdings acquiring 100% of Cirrus' ordinary shares via a Scheme of Arrangement.
• Premium Consideration: Under the Scheme, Cirrus shareholders will receive AU$0.053 per Cirrus share (Scheme Consideration), representing a substantial 29.3% premium to Cirrus' recent closing price and a 25.5% premium based on the 30-day VWAP to September 8, 2023.
• Flexible Options: Shareholders have the flexibility to choose their consideration, including 100% cash, 100% shares, or a combination of both. A default option of 75% cash and 25% shares is also available, subject to a scale-back mechanism.
• Anticipated Benefits: The acquisition is expected to boost Atturra's earnings per share (EPS) in FY24, providing a high single-digit EPS accretion on a pro forma basis. This calculation excludes one-off transaction or integration costs and includes a conservative assessment of expected synergies.
• Board Approval: The Scheme has received unanimous approval from the Cirrus Board of Directors.
• Strategic Expansion: This acquisition strategically fits Atturra's portfolio and will complement its recent acquisition of Somerville. It will expand Atturra's presence in the ACT, WA, and VIC regions and broaden its government and enterprise customer base.
• Transaction Details: The Scheme Consideration is capped at AU$37.5 million in cash and 13.98 million Atturra shares. The transaction, valued at approximately AU$49.3 million, boasts a favorable EV/FY23 Adjusted EBITDA multiple, even after considering anticipated synergies.
• Funding Structure: The acquisition will be funded through the issuance of new Atturra shares, debt financing, and existing resources, ensuring financial flexibility for future growth initiatives.
• Timetable: The Scheme is expected to proceed with the preparation of a Scheme Booklet to be dispatched to Cirrus shareholders in October 2023. Implementation is anticipated in December 2023, pending approvals.
• Advisers: Moelis Australia and HWL Ebsworth Lawyers are advising Atturra, while Latimer Partners and Corrs Chambers Westgarth are advising Cirrus.

This acquisition represents a significant step for Atturra, aligning with its vision to become a leading advisory and IT solutions provider in Australia. Cirrus' expertise in government and energy & resources industries is expected to strengthen Atturra's market presence and enhance its client base. The acquisition underscores Atturra's commitment to delivering outstanding outcomes to its clients and further establishing its role as a sovereign player in the ICT services sector.

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