We rate Citadel's management team and growth prospects

One IPO that has impressed the OC Funds investment team is The Citadel Group (CGL), which listed on the ASX in November 2014. CGL is a company that specialises in enabling an organisation’s knowledge capital by integrating systems, people and processes to provide information on an anywhere-anytime basis. The company has two key divisions, namely technology and education. We are particularly attracted to the larger technology division which services a number of high quality public and private sector clients under managed services contracts which provide predictable, recurring revenue streams. The company recently announced the transformational acquisition of PJA Solutions, a leading provider of managed technology services to the Australian health and pathology sectors. We forecast that the strategically sensible acquisition will increase the company’s EBITDA by over 80% and will be EPS accretive in the order of 40% (assuming no synergies) in FY16. We rate the management team highly and believe that the company’s pipeline of organic growth opportunities is solid.