SYS.GB SysGroup Plc

TIDMSYS

RNS Number : 4451J

SysGroup PLC

27 April 2022

The information contained within this announcement is deemed by the company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("UK MAR"). Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

27 April 2022

SysGroup plc

("SysGroup" or the "Group")

Acquisition of Independent Network Solutions Limited

SysGroup plc (AIM:SYS), the multi award-winning m anaged IT services, cyber security and cloud hosting provider , is pleased to announce the acquisition of 100% of the issued share capital of Independent Network Solutions Limited ("the Acquisition"), which trades as Orchard Computers ("Orchard"), a Bristol based managed IT service provider.

Highlights

 
      --   Acquisition of Orchard, a well-established managed 
            IT services provider for GBP1.0m in cash. 
 
                  *    Orchard generated unaudited revenues of GBP2.1m and 
                       EBITDA of GBP0.3m in the year to 31 December 2021. 
      --   The Acquisition will be funded from the Group's existing 
            cash balance. 
      --   Orchard will further enhance the Group's presence 
            in the South West region and will complement the 
            operations based in South Wales. 
      --   The Acquisition is expected to be immediately earnings 
            enhancing. 
 

Acquisition

Information on Orchard

Bristol based Orchard has been in operation for over 30 years and has built a loyal customer base totalling over 120 active clients in 2021, largely in the South West of England. The average length of relationship amongst their 20 largest clients is 12 years, with no single customer representing more than 7% of total revenues. Orchard represents customers across a broad range of sectors, covering both the private and public sectors. Its managed IT service offering mirrors that of SysGroup, providing high quality consulting services and building tailor made, vendor agnostic solutions, designed specifically to meet individual customer needs, followed by ongoing support. The Group believes that Orchard will further strengthen SysGroup's presence in the South West of England with the addition of more than 20 team members joining the wider SysGroup team.

In the year ended 31 December 2021, Orchard generated revenues of GBP2.1m, EBITDA of GBP0.3m and profits before tax of GBP0.3m. Recurring revenues in 2021 accounted for 56% of total income. Its net assets at 31 December 2021 were GBP0.3m.

Acquisition terms

SysGroup has agreed to acquire 100% of the issued share capital of Orchard, on a cash-free debt-free basis for a consideration of GBP1.0m in cash. The vendors of Orchard, Ian Terry and Chris Patten, will remain with SysGroup for a minimum period of three months to assist with the handover of customer relationships and integration into the Group.

Adam Binks, Chief Executive Officer, commented:

"I am thrilled to be announcing our second acquisition of the financial year. Orchard is a well-established, well-respected business with a loyal customer base in the South West of England and I am delighted that we have been able to bring this business into the Group.

"Our enhanced presence in the region will add even more value for the combined customer base and will create a raft of opportunity for all of our team members, including the addition of our 20 new colleagues from Orchard."

 
 For further information please 
  contact: 
                                      Tel: 0151 559 
  SysGroup plc                        1777 
  Adam Binks, Chief Executive 
  Officer 
  Martin Audcent, Chief Financial 
  Officer 
 
   Zeus (Nominated Adviser and        Tel: 0161 831 
   Broker)                            1512 
   Dan Bate 
   James Edis 
 
  Alma PR (Financial PR)              Tel: 07780 901 
  Josh Royston                        979 
  Matthew Young 
 

About SysGroup

SysGroup is a leading provider of managed IT services, cloud hosting, cyber security and expert IT consultancy. The Group delivers solutions that enable clients to benefit from industry leading technologies and delivers managed solutions with security, compliance and governance from the core. SysGroup focuses on a customer's strategic and operational requirements - enabling clients to free up resources, grow their core business and avoid the distractions and complexity of managing IT services.

The Group has offices in Bristol, Edinburgh, Liverpool, London, Manchester, Newport and Telford.

For more information, visit http://www.sysgroup.com

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