TIDMCSI
RNS Number : 1415P
Castle Street Investments PLC
16 February 2016
Castle Street Investments PLC
("Castle Street" or "the Company")
Acquisition of C4L
Castle Street Investments plc (AIM: CSI), is pleased to announce
that it has acquired C4L Group Holdings Limited ("C4L"), a
successful and growing network services and data centre hosting
business, for a total consideration of GBP20.2 million in cash and
shares (the "Acquisition").
Highlights:
-- Acquisition of C4L is a key component in building out Castle Street's platform
-- C4L brings a high quality core network infrastructure with
substantial capacity for growth and a broad data centre
infrastructure
-- 45 staff based in Bournemouth and Docklands, C4L provides
services to over 800 customers (primarily in the UK), over 90% of
its revenues are recurring
-- C4L's current trading in the three months to 31 January 2016
has delivered an annualised turnover of GBP14m and run rate EBITDA
of GBP2m with further growth expected
-- The acquisition will be immediately earnings enhancing and,
in line with the Company's strategy, will facilitate a broader
integrated service offering to a larger client base while focusing
on delivering higher margin services
-- Mathew Hawkins, C4L Chairman and Founder, and Simon Mewett,
C4L CEO, will join the Board of Castle Street Investments PLC as
Chief Technology Officer (CTO) and Chief Operating Officer (COO)
respectively.
Founded in 2000, C4L is a successful and growing network
services and data centre hosting business. C4L owns and manages
core network infrastructure and data centre assets, including:
-- coreTX(TM) - one of the UK's largest privately owned 100Gbps
MPLS network built on modern Juniper technology
-- coreTX(TM) is ready for the next generation of software
defined networking ("SDN"); offering a substantial advantage over
most legacy networks
-- fibre connectivity into over 50 data centres across the UK
-- a 3MW data centre in Bournemouth
-- one of the UK's largest on-net DDoS Cloud protection
platforms available in 50% of the UK's data centres
-- PortaOne - a carrier grade VoIP platform.
Andy Ross, CEO of Castle Street, commented: "C4L combined with
our recent acquisition of Selection Services demonstrates the
progress we are making towards becoming an integrated IT Services
and Cloud provider. C4L has a high quality, next generation
infrastructure which has been well invested. Allied to a successful
business with high levels of recurring revenue it offers strong
growth opportunities. The enlarged customer base and product
portfolio strengthen and consolidate our position in the industry
and as a Board we are excited by this Acquisition which supports
the next step in the Company's development.
Jonathan Watts, Chairman of Castle Street added: "Matt and Simon
have done an excellent job in building C4L. We welcome them to the
Board and look forward to their contribution as we continue to
execute on our focused growth strategy."
Castle Street Investments
plc
Andy Ross, Chief Executive Tel: +44 (0) 7899 664
Officer 193
Julian Phipps, Chief Tel: +44 (0) 7852 714
Financial Officer 674
N+1 Singer (Nominated Tel: +44 (0)20 7496 3000
Adviser and Broker)
James Maxwell
Jen Boorer
MXC Capital Markets LLP Tel: +44 (0)20 7965 8149
(Financial Adviser)
Marc Young
Charlotte Stranner
Alma PR
Josh Royston Tel: +44 (0) 7780 901
979
John Coles Tel: +44 (0) 7836 273
660
Further Information on the Acquisition and Proposed
Directors:
The addition of C4L will create a business with a total of over
400 highly skilled staff, and the combined strengths in networks,
data centre and managed services means the Company can now offer a
much broader range of products and services to a wider customer
base.
The Acquisition is for the entire issued share capital of C4L
Group Holdings Limited and the following subsidiaries;
Connexions4London Limited, Mimic Ltd and Orbis Telecom Ltd (the
"Group").
For the year ended 31 October 2015, the Group's revenue amounted
to GBP13.9 million with a reported loss before tax of GBP0.40
million. At 31 October 2015 the Group's gross assets amounted to
GBP5.2 million. EBITDA for the year to 31 October 2015 amounted
GBP1.0 million.
The total consideration payable for the acquisition is
approximately GBP20.2m and is to be satisfied by GBP14.2m in cash,
funded through the Company's existing cash resources and debt
facilities, with the balance to be satisfied through the allotment
of 18,346,918 new ordinary shares in the Company, to be issued at a
price of 32.5p per share ("Consideration Shares"). In addition as
part of the Acquisition the Company will assume liabilities of
approximately GBP2.8 million. The Consideration Shares will be
subject to a 12 month lock-in agreement, followed by certain
orderly market provisions for a further 12 month period.
Application will be made to the London Stock Exchange for the
Consideration Shares to be admitted to trading on AIM and admission
is expected to take place on or around 19 February 2016
("Admission").
Following Admission, the number of Ordinary Shares that the
Company will have in issue will be 190,902,721. The total number of
voting rights of the Company will be 190,902,721. This figure may
be used by Shareholders as the denominator for the calculations by
which they will determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the FCA's Disclosure and Transparency Rules.
Mathew Paul Hawkins, aged 40, has held the following
directorships during the past five years:
Current:
Connexions4London Limited
C4L Group Holdings Limited
C4L Ltd
Fibreband Networks Ltd
Fibreband Ltd
Fibreband Media Ltd
Infiniserv Limited
Orbis Telecom Ltd
Mimic Ltd
Teletracks Limited
Previous:
Save for the above, there is no further information required to
be disclosed under paragraph (g) of Schedule 2 of the AIM Rules,
with respect to the appointment of Mathew Hawkins.
Simon Charles Mewett, aged 49, has held the following
directorships during the past five years:
Current:
Connexions4London Limited
C4L Group Holdings Limited
Previous:
Easy Computers (Southern) Limited
Easy Networks Limited
Kent IT Maintenance Limited
Iugo Group Limited (formerly Easy Group Limited)
Iugo Mobiles Limited (formerly Easy Mobiles Limited)
Iugo Telephones Limited (formerly Easy Telephones Limited)
Save for the above, there is no further information required to
be disclosed under paragraph (g) of Schedule 2 of the AIM Rules,
with respect to the appointment of Simon Mewett.
Information to be disclosed pursuant to Schedule 4 of the AIM
Rules:
Mathew Hawkins
Mathew has entered into a letter of appointment with the Company
dated 15 February 2016 in relation to his appointment as Chief
Technology Officer. Mathew has also entered into a service
agreement with Connexions4London Limited. The service agreement can
be terminated by either party giving to the other not less than six
months' notice in writing. The agreement contains provisions for
early termination, inter alia, in the event that he breaches any
material term of the agreement. The basic salary payable to Mathew
is GBP140,000 per annum. This is to be reviewed on 1st January each
year without any obligation to increase the same. In addition,
Mathew may be eligible to participate in bonus schemes from time to
time, such participation being at the sole discretion of the
employer. He is also entitled to basic healthcare for himself and
his immediate family, death in service cover at the level of four
times basic salary and a car allowance of GBP7,000 per annum,
payable monthly. Connexions4London Limited operates an
auto-enrolment pension scheme with the level of employee and
employer contributions being set out in the service agreement. The
service agreement contains restrictive covenants for a period of 6
months following the termination of his employment.
Simon Mewett
Simon has entered into a letter of appointment with the Company
dated 15 February 2016 in relation to his appointment as Chief
Operating Officer. Simon has also entered into a service agreement
with Connexions4London Limited. The service agreement can be
terminated by either party giving to the other not less than six
months' notice in writing. The agreement contains provisions for
early termination, inter alia, in the event that he breaches any
material term of the agreement. The basic salary payable to Simon
is GBP140,000 per annum. This is to be reviewed on 1st January each
year without any obligation to increase the same. In addition,
Simon may be eligible to participate in bonus schemes from time to
time, such participation being at the sole discretion of the
employer. He is also entitled to basic healthcare for himself and
his immediate family, death in service cover at the level of four
times basic salary and a car allowance of GBP7,000 per annum,
payable monthly. Connexions4London Limited operates an
auto-enrolment pension scheme with the level of employee and
employer contributions being set out in the service agreement. The
service agreement contains restrictive covenants for a period of 6
months following the termination of his employment.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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