Elecosoft, a subsidiary of AIM-listed built environment software specialist Eleco, has acquired 100% of the share capital of Vertical Digital for an initial €1.3m.
The Vertical Digital group comprises software development firm Vertical Digital and Romania-based Sons of Coding. The group has provided software development, technical consulting and upskilling across a number of European and multinational customers, including Lufthansa Technik, PwC, VW Financial Services, Deloitte and Zoopla.
In the year to 31 December 2023, Vertical Digital delivered revenue of €1.2m and a net profit before taxation of €300,000 based on unaudited figures and Vertical Digital’s accounting policies.
Eleco said the acquisition will add critical capabilities, including the ability to service and scale its customers by connecting systems and providing technical consulting, which will support digital transformation journeys.
The acquisition will also provide for elastic augmentation of internal research and development capacity, which will further improve product time to value, it added.
The transaction terms provide for a cumulative potential deferred and contingent outflow (earn out) of a maximum total of €250,000 payable in 2026, based on the Vertical Digital business attaining specific revenue and profitability performance targets set by Eleco during the financial years ending 31 December 2024 and 31 December 2025.
Jonathan Hunter, chief executive officer of Eleco, said: “We are pleased to welcome Vertical Digital to the group, which will accelerate our ability to support our customers in solving the challenges they are face in delivering their digital transformation strategies. Eleco is now better positioned to provide a broader range of solutions and engage with more of its customers and partners on their strategic technological direction.
“We are impressed with the calibre of customers that Vertical Digital has serviced and the experience and talent of our new colleagues. In addition, we are delighted that the two founders of Vertical Digital are committed to supporting the growth ambitions of the group. Dan Pop will be responsible for expansion in Eastern Europe as regional managing director, Eastern Europe, and Alex Gheboianu will ensure the group continues to innovate and retain world-class technical talent as chief technology officer.
“Vertical Digital expands Eleco’s capabilities and increases the opportunities available to the group and we look forward to the future with confidence.”
