Niche IT software consolidator CSG – one of Growth Company Investor’s picks for 2006 at 68p – has made a further move into the legal sector through the acquisition of Laserform. ‘We’ve now done two deals in legal, and you can expect more,’ teases chief executive Vin Murria.

Cash generative CSG has paid £4.8m – £4.3m in cash from banking facilities, the rest in shares – for Laserform, a provider of documentation and practice management software. It boasts over 2,000 clients, including 80 of the top 100 UK legal practices, and great levels of revenue visibility. If you factor in the £1.5m of cash on Laserform’s balance sheet, the true ‘enterprise’ price paid was lower at £3.3m.

Laserform sported sales last year of £4.1m last year, making £500,000 at the EBITA level. As such, it should enhance CSG earnings this year. If Murria can turn a profit at AIM Group, the legal software venture she bought in May for £5.3m, this intriguing niche could become increasingly important for the company

Analyst Derek Brown of house broker Seymour Pierce has upgraded his February 2007 numbers from sales of £36m to £38.8m, up from last year’s £25.2m. Those revenues should deliver adjusted pre-tax profits of £7.8m and 9.4p of earnings, figures that place the shares on a forward p/e of 10.2. That rating looks miserly, given earnings are forecast to burgeon by 20.5% in the current year. This group is a strong buy.

Computer Software Group	AIM	0pm	p	p
Click here for interactive charting
Other company articles:
Computer Software Group ups the ante			11/12/2006
SIT down after cash call			30/06/2006
Computer Software Group			27/06/2006
Murria takes over AIM			02/05/2006
Our picks for 2006			05/12/2005