Last night it was announced that Torex had been acquired by NASDAQ-quoted Micros Systems for £114.5m in cash plus the assumption of £48m debt (ie £162m) Given Micros significant position with c$1b annualised revenues in the retail/hospitality systems & PoS market on a global basis, Torex is a great fit. Conversely, I have some sadness seeing yet another UK-HQed company swallowed up by a foreign buyer.
I started a recent post on Torex - Torex adapts to new retail landscape – with the words “I seem to have reported on Torex for most of my life as an analyst”. Indeed I even knew them back in the 1990s when they were a tool hire company. Then came the infamous iSoft acquisition in 2003 – the fallout from that (nothing now to do with the current Torex I might add) is in the courts at the moment. Then in 2007 iSoft was rescued by IBA (before being rescued again by CSC) and Torex was itself ‘rescued’ by PE player Cerberus for £204m. Although it looks like Cerberus will be nursing a loss I understand they wrote this investment down a considerable time ago - so they are probably pretty happy now.
But that was before Steve Rowley was appointed in 2009 when they really started their fightback. I’ve known Rowley for many years particularly from his stint as CEO of Anite – indeed ‘persuaded’ him to take on the Chair of the Prince’s Trust Retail Leadership Group last year. I was really impressed with what Rowley did with Torex in a most difficult trading environment for retail. Revenues in the latest year were flat at £135.5m but EBITDA (oh how I hate that term) increased 5x to £11.8m – so they were on the right trajectory. Then in Jan 12, Torex acquired the Retail division of Sanderson for £11.75m; adding a further £12m of revenues. See Torex acquires RBS from Sanderson.
I am a bit unsure exactly what will happen to Rowley after he’s seen the sale process through. But he’s a fine operator and I’m sure will be in demand wherever.
Footnote – When Rowley was appointed to Torex in 2009 we met and he asked my advice on what to do. I replied “First, change the name”. It was a ‘robust’ discussion that reoccurred each time I have met him since. Last night I had a cryptic email from Rowley saying “Richard, we finally listened to your argument on the name and have decided to change it to Micros!”