Croma Security acquires AST for £1.74 million in specialist systems expansion

Croma Security Solutions Group has completed the acquisition of Added Security Technology Limited, or AST, for approximately £1.74 million.

The deal brings a profitable Portsmouth security business into the group, together with £0.80 million of cash and a freehold property valued at £0.53 million. AST generated revenue of £1.8 million and adjusted EBITDA of £0.3 million in the year ended 31 August 2025.

Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, with certain exceptional or non-underlying items removed. It is commonly used as a measure of a business's underlying operating performance.

Management describes AST as Croma's largest acquisition since the £6.5 million disposal of its Vigilant man-guarding operation in 2023. For investors following Croma Security Solutions Group PLC, this is a meaningful deployment of the capital released by that disposal.

The key acquisition figures

Measure	Figure
Total consideration	Approximately £1.74 million
AST revenue for year ended 31 August 2025	£1.8 million
AST adjusted EBITDA	£0.3 million
Cash acquired with AST	£0.80 million
Freehold property value	£0.53 million
Consideration shares	£36,000
Maximum deferred consideration	£50,000
AST employees joining Croma	23
Council contract extension	10 years

The headline price represents approximately 5.8 times AST's latest adjusted EBITDA. However, that simple multiple does not account for the cash and property included in the acquisition.

Subtracting the £0.80 million cash balance from the consideration leaves approximately £0.94 million. If the stated £0.53 million property value is also removed, the remaining amount is roughly £0.41 million.

That does not necessarily represent the underlying enterprise value of AST. Details covering its debt, working capital, other assets and liabilities were not disclosed. Still, the cash and freehold property provide important context when assessing the £1.74 million headline price.

What AST brings to Croma

AST has operated for more than 30 years and specialises in communal door-entry and intercom systems, key fobs, secure entrances and locksmith services.

It also has a growing operation supplying aids for people with hearing impairments, including hearing loops and flashing doorbells. This gives Croma access to a specialist technical capability beyond traditional locksmith and general security services.

The customer base includes regional housing associations and commercial clients. The most notable relationship is a contract with a local council covering door-entry systems and entrance doors across its social-housing programme.

That contract has recently been renewed for another 10 years. The RNS does not disclose its value, revenue contribution or profitability, but the long duration should provide a degree of revenue visibility.

AST's 23 locally based employees will join Croma. The team adds engineering and advisory capability, while general manager James Sullivan will remain in charge of the business. Founders Paul and Susan Sullivan are retiring following completion.

Keeping an existing senior manager in place should help preserve customer relationships and technical knowledge during the transition. It does not remove integration risk, but it is a more orderly handover than replacing the full leadership team immediately.

How the acquisition fits Croma's strategy

Croma is building a national network of security centres through the acquisition of established local locksmith and security businesses.

Its network currently contains 17 security centres, stretching from Southampton through the Midlands and into north-west England. The company says it also has a strong pipeline of further stores that could join the network.

AST appears complementary rather than simply another retail location. Its specialist intercom, communal-entry and accessibility products could potentially be offered through Croma's wider network.

Chief executive Roberto Fiorentino highlighted opportunities to use AST's technical capabilities across the group's security centres. The potential benefit is therefore not limited to AST continuing its existing Portsmouth operation. Croma may also be able to introduce those services to a broader customer base.

No financial estimate for these potential synergies was disclosed, so investors should treat them as an opportunity rather than guaranteed value.

How Croma is paying for AST

The acquisition is being financed mainly from Croma's existing cash reserves.

A further £36,000 of consideration is being satisfied through the transfer of 52,863 ordinary shares held in treasury, valued at 68.1p per share. Up to £50,000 of deferred consideration may also become payable following the collection of certain trade debtors during the six months after completion.

Using treasury shares means Croma's issued share capital remains unchanged at 15,898,656 shares. However, because the consideration shares are moving out of treasury, the number of shares carrying voting rights has increased.

Following the transfer, Croma holds 2,077,538 shares in treasury and has 13,821,118 total voting rights. The consideration shares represent around 0.38% of the post-transaction voting rights, so the resulting dilution to existing shareholders' voting percentages is modest.

The company did not disclose its remaining cash balance after completion. That is an important omission because Croma intends to continue making acquisitions, and investors will want to understand how much funding capacity remains.

What looks positive for shareholders

The clearest positive is that Croma is acquiring an established and profitable operation rather than an early-stage business.

AST brings £1.8 million of annual revenue, £0.3 million of adjusted EBITDA, an experienced workforce and a long-term local-authority relationship. The acquired cash and property also support the apparent value of the transaction.

The deal broadens Croma's technical offering, particularly in communal-entry systems and products for people with hearing impairments. If these services can be sold across the existing network, the strategic value could exceed AST's standalone earnings contribution.

Funding the transaction mostly from existing cash also avoids a large new share issue.

Risks and unanswered questions

There are several areas investors cannot assess fully from the announcement.

Croma did not disclose AST's statutory profit, net debt, working-capital position, customer concentration or the proportion of revenue linked to its council contract. Integration costs and the expected contribution to Croma's earnings were also not disclosed.

The departure of AST's founders creates some succession risk, although the retention of James Sullivan should reduce disruption. Meanwhile, the use of cash lowers Croma's financial flexibility for future acquisitions, even if AST's own £0.80 million cash balance offsets part of that outlay.

There is also execution risk attached to management's cross-selling ambitions. Specialist expertise does not automatically translate into additional revenue across a larger network.

The next numbers investors need

On the disclosed figures, AST appears to be a strategically sensible addition with tangible assets, positive EBITDA and a valuable long-term contract.

The next priorities are evidence that AST has integrated smoothly, clarity on its contribution to group earnings and an updated view of Croma's cash resources. Investors should also watch whether the specialist services gained through AST generate business elsewhere in the network.

The full details are available in the original company announcement.