As the chief executive at one of the fastest-growing companies listed on London’s Alternative Investment Market (AIM), Vin Murria has grown revenues by 68 per cent over the previous year, with EBITDA up by the same amount.

One of the biggest driving forces behind the surge has been Advanced Computer Software‘s acquisitive nature, snapping up companies in the healthcare software sector.

As a supplier of software and IT services to the health, care and commercial sectors, the business has in its stable IT management and analytics offerings and back-office systems for the likes of NHS trusts, local authorities and care providers.

The business is one of a number of other AIM-listed companies that are making the most of a renewed institutional investor appetite to close deals and begin to utilise some of the dry powder that accumulated during the quieter post-recession years.

Recent research put together by GrowthBusiness shows that the volume and value of M&A deals involving AIM companies, both acquisitions and disposals, increased significantly in 2013 compared to 2012, 2011 and 2010. This rude health is in contrast to flat or declining M&A volumes and values across the UK as a whole.

Acquisitions have always been at the forefront for Advanced Computer Software, and the business has now closed six transactions in the last two years.

Murria believes that AIM is the right place for high-growth, but that the market currently has a number of which listed during the heady days and now probably shouldn’t be.

Her key to success is focusing on reality, and not hype. ‘We focus on what a good business should look like and make sure we measure up to that,’ she adds.

‘You have to have the right metrics, the right KPIs in terms of debt and cash collection. It is a numbers and metrics game, backed up with great service and delivering on what your customers want.’

The biggest recent deal for Advanced Computer Software came in February 2013 when the business acquired Computer Software Holdings for £110 million from HgCapital. The transaction was financed through a combination of existing cash resources, new bank debt and a recent share placing that banked £44 million.

‘We paid a sensible price for the business and knew what we could do with it, and that is what has been proven,’ Murria says.

‘When you look at scale it was 7x or 8x but was a business going backwards, and we’ve got it going forwards with organic growth. We took a year to bed that down before we did anything else.’

More on Vin Murria and Advanced Computer Software:

• Acquisitions on the agenda for Advanced
• Software supremo: Vin Murria
• Top 50 entrepreneurs and investors of 2012

Since taking up the helm of Advanced Computer Software in 2008, Murria has now found that the business has become a natural destination for companies looking to exit to come to.

The business leader feels that the firm still has a ‘small company thinking’, despite a market cap of 600 million and staff count of 2000. Recent acquisition Compass Computer Consultants, which was snapped up for a total cash consideration of £14.5 million in March 2014, is an example of where the CEO made a conscious decision to sell to Advanced Computer Software.

Having seen the company’s share price steadily increase under her tenure, Murria says there are a couple of key ingredients to maintaining a healthy listing. ‘If you have a strong management team, a good track record and proof that you are going to do what you say you are the markets and banks are very supportive,’ she declares.

The reason Advanced Computer Software continues to be traded on AIM is the corporate governance that it affords. Sitting on the board of a number of other companies, Murria is well versed in how it operates in other spaces.

‘There is the opportunity to do acquisitions on AIM without too much noise, which allows us to be sensibly strategic and move quickly. That is the trouble that comes with a full listing.’

Cash is available, the CEO says, and adds, ‘If you are the right kind of business and can get the right form of banking facilities, it is a good time to have debt.

‘Even if Carney does put up interest rates we are still at low ones. We are able to leverage debt at a level below inflation – why, because out of £200 million of revenues 85 per cent comes from recurring. It’s almost a classic annuities business that banks love.’

For the time being Murria is very happy with moving forward using a model that has brought with it a lot of success. The network of happy acquired businesses that has built up appears to provide the company with a strong line of referrals, giving Advanced Computer Software a pipeline big enough to remain one of the most active AIM acquirers.