Proposed acquisition of Synergy from Tribal Group plc

Servelec, the UK-headquartered technology group, is pleased to announce that it has conditionally agreed to acquire the Synergy business (“Synergy”) from Tribal Education Limited a wholly-owned subsidiary of Tribal Group plc (“Tribal” or the “Seller”) for a consideration of £20.25 million (the "Acquisition") in cash on completion. The Acquisition is a Class 1 transaction for the Seller under the Listing Rules and is therefore conditional, inter alia, upon Tribal attainting approval for the disposal from its Shareholders.

Overview of proposed acquisition

  • The Servelec Board is firmly committed to the Converged Care agenda, and has a growth strategy focused on capitalising on this important opportunity
  • Synergy provides a comprehensive suite of software products that helps local authorities manage critical information within Children’s Services including education, safeguarding and children’s centres
  • Implemented in over 100 Local Authorities in England and Wales, Synergy’s solutions have excellent customer retention and a proven ability to unseat incumbent vendors
  • The combination of Synergy with Servelec’s existing product suite provides a unique end-to-end solution for Early Help, Care and Support to existing and new customers
  • Legislative changes in Children’s Services will see all local authorities becoming responsible for Children’s Community Health by 2020
  • Together, Servelec Group is well positioned to quickly become the market leader in this changing environment   

Principal terms of the Acquisition

Pursuant to the terms of the Acquisition, the business and assets of Synergy will, immediately prior to completion, be transferred to a newly incorporated wholly-owned subsidiary which will be acquired by Servelec for a cash consideration (including repayment of intra-group debt) of £20.25 million on a debt-free cash-free basis. The consideration is being financed through a combination of a new bank facility from Lloyds Banking Group as well as existing cash reserves.

The Board of Tribal has recommended the proposed disposal of Synergy to their shareholders. Completion of the Acquisition by Servelec is conditional, inter alia, on theSeller attaining approval from its shareholders.

In the year ended 31 December 2015, the business and assets of Synergy recorded revenues of £6.3 million. After making an adjustment for the estimated recharges for group central services not recorded in Synergy’s accounts; it contributed an operating profit of £2.7 million, before allocation of central services, and gross tangible assets of £2.1 million. The proposed purchase includes the intellectual property rights for the Synergy suite, transfer of 63 skilled professionals, strong customer relationships together with contracts and maintenance agreements and a property lease on Synergy’s current premises.

Under Servelec’s ownership Synergy will require additional capex investment in hosting and IT infrastructure and also the provision of central services support both of which were previously provided by the Tribal Group.

The Synergy team is led by Steve Kierney who will continue in his role to maintain strategic direction to the team and high quality service provision to new and existing customers.

The Board of Servelec expects the Acquisition to be earnings enhancingin the first full year of ownership and is confident in the market growth opportunities for the business going forward. 

Due to their position as board members of the Seller, neither Richard Last or Roger McDowell, Chairman and Non-Executive Director of Servelec respectively, have participated in the Group’s discussions, negotiations or decisions relating to the Acquisition.

Completion is expected to occur during March 2016.

Background to and reasons for the Acquisition and information on Synergy

The Acquisition offers a compelling fit with Servelec’s strategy to drive market share growth in existing areas and to expand into adjacent, complementary markets. The addition of Synergy positions Servelec strongly to provide an end-to-end solution in Children’s Services offering a single view of a child across all areas of service provision. The combined offering provides access to both companies’ systems and brings data together into one easily accessible place, supporting much greater collaboration across local authorities and reducing the requirement for duplicate data entry.  The transaction will provide opportunities for the combined business to expand its remit and increase its relevance to local authorities.

Synergy’s software solutions have been designed in collaboration with experts in education and social care practitioners to provide local authorities with a flexible and innovative approach to managing critical information within Children’s Services departments. The solution is designed to adapt to changes in policy or legislation, while ensuring practitioners can focus on keeping children and young people safe. The Synergy suite includes an online admissions system for parents, local authorities and schools to record details and decisions of school applications as well as facilitating the receipt of data regarding each child’s education activity and needs-based support enabling a holistic view of the child to be provided to authorised practitioners.

The Acquisition further strengthens Servelec’s position in the Social Care market following the acquisition of Corelogic in December 2014. Synergy will become part of Servelec’s Social Care business unit, a constituent part of Servelec Health & Social Care segment.

Alan Stubbs, CEO of Servelec Group said:

"I am delighted to announce the proposed acquisition of Synergy, which is another step forward by Servelec to capitalise on the growth opportunities offered by the Converged Care agenda,

Building on a strong year for Servelec’s Social Care business, driven by the successful acquisition and integration of Corelogic, Synergy will allow our combined Local Government clients to improve child care by having a single view of a child’s needs. It strengthens the suite of products available to new and existing customers and fits within our strategy of acquiring complementary businesses that will provide both short-term and long-term benefit to the Group as a whole.

“With our customers and potential customers needing the broader picture of child welfare to provide the care and support required, our purchase of Synergy gives Servelec the strongest and broadest offering in the market.”


For further enquiries, please contact:

Servelec Group plc

Alan Stubbs, Chief Executive Officer

Mike Cane, Chief Financial Officer

Pamela Weeks, Corporate Communications and PR

+44 (0) 1246 437 400




Tulchan Group

James Macey White

Nick Hennis

+44 (0) 20 7353 4200


Notes to Editors

Servelec Group plc is a UK-based technology group, with significant intellectual property, providing software, hardware and services predominantly to the UK healthcare, oil & gas, nuclear, power, water, utilities and broadcast sectors.

Servelec has two operating segments; Servelec Health & Social Care and Servelec Automation:

-    Servelec Health and Social Care specialises in the design, development and implementation of Electronic Patient Record (EPR) and Patient Administration Systems (PAS) and Social Care Case Management software within secondary care and social care settings and is a market leader in the Mental Health, Community Health and Social Care sectors in England.

-    Servelec Automation provides complex, mission-critical control systems to large blue-chip companies mainly in the UK, focusing on the oil & gas, nuclear, power, water, utilities and broadcast industries.  Servelec Automation also provides services from consultancy through to design, implementation, delivery, installation and on-going customer support and maintenance.