Friday, 16 January 2009

Tribal acquires Newchurch

Tribal Group (one of the listed service suppliers to the Public Sector that I rate highly since its refocusing in 2007) has announced the £10.5M acquisition of Newchurch Ltd.

Newchurch is effectively a supplier of consultancy services at a senior level to healthcare organisations, primarily in the Public Sector, although it has a significant presence in the private sector also.

This seems a useful acquisition for Tribal, extending the services offerings that Tribal has in the UK healthcare sector. The acquisition also increases confidence that Tribal will confirm that last year’s trading to 31 December 2008 has been firm and in line with expectations, with its trading statement due on 28 January – I would expect an annualised profit of around £12M (eps around 14p) – and with the new acquisition, annualised revenue in excess of £200M going forward. Tribal’s share price at the time of writing this post is 80.5p (down from around 140p in September), giving a market cap of c £71M and an enterprise value of c £93M.

P.S. I will own up to having sold my Tribal shares back in September, and have not yet bought back in, despite the share price having fallen to 66p late last year.

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