Morse buys tech consultancy Xayce

Morse buys tech consultancy Xayce

UK systems house Morse has acquired Xayce, a provider of back office IT consultancy services founded by former Accenture staff, for an initial consideration of £3.6 million in cash and shares.

Morse says the initial £3.6 million payment for privately-owned Xayce consists of £2.35 million of cash and £1.25 milllion of shares.

A further £2.5 million will be paid in Morse shares, conditional upon the achievement by Xayce of agreed profitability and other targets over the period to 30 June 2010.

Manchester-based Xayce was founded in 1998 by a number of ex-Accenture consultants. The company provides back office consultancy services to organisations in the insurance, retail banking and local government sectors, including Royal & Sun Alliance, Allied Irish Bank, Lloyds TSB, Abbey, Barclays Bank and several City and County councils across the UK.

In the year to 31 March 2007, Xayce reported revenues of £4.0 million, of which approximately 75% came from financial services clients.

The unit will be integrated into Morse's management consulting business division. Morse says the acquisition will enable it to deepen its industry knowledge in financial services and the public sector and accelerate the development of its management consultancy business.

"We already have a strong market position in financial services, and the acquisition of Xayce will further enhance our management consultancy capabilities in insurance and retail banking as well as giving us additional consultancy capability and relationships to more effectively position ourselves for the back office transformation work coming on stream in local government," says Morse CEO, Kevin Alcock.

Morse says the acquisition will be earnings enhancing in its current financial year ending 30 June 2008.

Earlier this year London-based Morse spun off its mobile banking arm Monitise and listed the business on the AIM junior market.

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