TIDMCOR
RNS Number : 7355B
CORETX Holdings PLC
06 April 2017
CORETX Holdings Plc
("CORETX" or the "Company")
Acquisition of 365 ITMS Limited
CORETX Holdings plc (AIM: COR), the mid-market network, cloud
and IT managed services provider, is pleased to announce the
acquisition of 365 ITMS Limited ("365IT"), a leading UK IT support
and services provider, for an enterprise value of GBP5.4 million
(the "Acquisition").
Highlights
-- 365IT is an IT support and services provider, offering a
range of complementary data centre, network, security and cloud
services with a particular strength in voice and unified
communications and expertise in both Cisco and Microsoft
solutions
-- Using the '5i' brand, 365IT has established a successful channel model
-- 365IT has 110 staff and over 450 customers across a range of industries
-- In the 10 months to 31 January 2017, 365IT generated revenue
of GBP12.7 million, of which 45% is recurring and EBITDA of GBP0.5
million
-- Based in Riseley and Poole, the company's locations are a strong geographic fit
-- Strategic acquisition that complements and expands CORETX's
products and services portfolio (voice, unified communications and
cloud offerings in particular) and provides cross and upsell
opportunities
-- GBP5.4 million enterprise value, payable as follows:
-- GBP1.6 million in cash, financed from CORETX's existing bank facility
-- GBP3.0 million in new ordinary shares in the Company at a price of 30.53 pence per share
-- Assumption of GBP0.6m cash balances and a GBP1.4 million debt balance
-- The Acquisition is expected to be earnings enhancing in the first full year of trading
Jonathan Watts, Non-Executive Chairman of CORETX, commented:
"We are delighted to announce the acquisition of 365IT which we
believe is highly complementary on both a product and service level
as well as geographically. 365IT has a very strong IT services
pedigree, with excellent voice, unified communications and cloud
capability which we believe will accelerate CORETX's presence in
these high growth areas and enable us to provide our customers with
a broader and more comprehensive offering."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
CORETX Holdings Plc Tel: +44 (0)844
Andy Ross, CEO 874 1000
Julian Phipps, CFO
N+1 Singer Tel: +44 (0)207
Nominated Adviser 496 3000
and Broker
James Maxwell
Liz Yong
MXC Capital Markets Tel: +44 (0)20
LLP 7397 8900
Financial Adviser
Marc Young
Charles Vivian
Alma PR Limited Tel: +44 (0)7780
Josh Royston 901 979
Robyn McConnachie
Further information on 365IT
365IT was established in 2011 by the combination of four trading
companies, bringing together expertise in the fields of data
back-up, IT infrastructure and unified communications to become a
provider of information and communication technology solutions and
services to the mid-market. In April 2016, 365IT acquired the
entire issued share capital of Deverill Group Limited, a competitor
with similar operations based in Poole.
365IT is an established IT managed services provider, with
particular expertise in voice and unified communications, and a
services portfolio that includes private cloud, contact centre
solutions, connectivity, collaboration and security solutions and
training.
The group has a long-term relationship with Cisco for which it
is an established training partner as well as having strong
Microsoft skills, including Office 365 and Skype for Business, and
is highly experienced in integrating Cisco and Microsoft platforms.
In addition, 365IT has a well-established channel model using its
5i brand which has resulted in key relationships with Tier 1 system
integrators and managed services players such as CDW, Misco and
RICOH.
365IT has over 450 customers and employs 110 people across its
sites in Riseley (near Reading) and Poole, 70 of whom are technical
staff. The Acquisition is expected to provide the enlarged group
with good opportunities for cross-selling its products and services
across the combined client base.
For the 10 months ended 31 January 2017, unaudited management
accounts show that 365IT generated revenue of GBP12.7 million, of
which 45% is recurring, EBITDA of GBP0.5 million and was break even
at a profit before tax level. Net assets as at 31 January 2017 were
GBP3.4 million.
The majority shareholder in 365IT was LMS Capital Plc, who is
advised by Gresham House Asset Management.
Terms of the Acquisition
The Company has entered into an agreement with the vendors of
365IT pursuant to which it has agreed to acquire the entire issued
share capital of 365IT. The enterprise value for the Acquisition is
GBP5.4 million, satisfied as to GBP1.6 million in cash and GBP3.0
million in new ordinary shares of 2.5 pence each in the capital of
CORETX ("Ordinary Shares") at a price of 30.53 pence per Ordinary
Share, being 9,826,400 Ordinary Shares (the "Consideration
Shares"). The price per share is based on the average closing
mid-price of an Ordinary Share for the month of March 2017. In
addition, CORETX will assume 365 IT's cash balances of GBP0.6m and
debt balance of GBP1.4 million with The Royal Bank of Scotland plc
("RBS"). The cash element of the consideration has been funded out
of the Company's existing debt facility with RBS.
Issue of Equity/Total Voting Rights
A total of 9,826,400 Ordinary Shares have been allotted to the
vendors of 365IT. The Consideration Shares are subject to a 24
month orderly market agreement whereby the holders have undertaken
to make any disposal through the Company's brokers.
Application has been made for the Consideration Shares to be
admitted to trading on AIM ("Admission"). Admission is expected to
occur at 8 a.m. on 12 April 2017. Following Admission, the total
number of Ordinary Shares in issue will be 200,729,121. There are
no Ordinary Shares held in treasury and so the total number of
voting rights in the Company will be 200,729,121.
The above 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, Guidance and
Transparency Rules.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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April 06, 2017 02:00 ET (06:00 GMT)
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