TIDMIOM
RNS Number : 5711B
Iomart Group PLC
05 June 2023
5 June 2023
iomart Group plc
("iomart" or the "Group" or the "Company")
Acquisition of Extrinsica
Acquisition of high growth Microsoft services provider brings
in-demand expertise to iomart portfolio
iomart Group plc (AIM: IOM), the cloud computing company, is
pleased to announce that it has agreed to acquire the entire issued
share capital of Extrinsica Global Holdings Limited ("Extrinsica"),
the holding company of Extrinsica Global Limited (the
"Acquisition"). Extrinsica is a Microsoft Azure Cloud solution
services provider with offerings including managed Azure Cloud,
Azure solution design and implementation services, support &
optimisation services and licencing.
Highlights
-- Acquisition of deep Microsoft Azure expertise and experience
aligns fully with iomart's secure hybrid cloud strategy
-- The enriched skills from this acquisition will be available
to existing iomart customers to support their Microsoft
requirements
-- Addition of new customer base, who will now have the full
iomart product offering available to them
-- Shared values and culture providing positive environment for future growth
Extrinsica was incorporated in 2010 as a Cloud services provider
to micro businesses. It was in 2017 that its current business model
was established when it was invited by Microsoft to become one of
the first 25 Microsoft Azure CSP partners worldwide. It is now
solely Azure public cloud focused.
The Acquisition provides iomart with deep Microsoft Azure
expertise, a highly capable team of 33 based in the UK, strong
customer references and a shared value and vision for how the
Microsoft Practice in iomart should be shaped to support
acceleration of growth.
Simon Smith, CEO and Co-Founder of Extrinsica, will continue to
lead the business as CEO supported by his highly skilled and
experienced team. From a legal, financial and governance
perspective, they will be very much part of the iomart Group.
For the year ended 31 March 2023, Extrinsica generated revenues
of GBP7.4m, being year on year growth of c.40%, and EBITDA of
GBP0.1m (unaudited). The acquisition is not considered a
substantial transaction as defined in AIM Rule 12.
Consideration
The initial consideration for the Acquisition is GBP4.0m, with a
potential further GBP0.3m in cash payable on the achievement of
certain key customer targets during the calendar year. Of the
initial consideration, GBP2m will be satisfied by the issue of
1,562,500 new ordinary shares in iomart, which under the terms of
the Sale and Purchase Agreement are subject to a 12 month "lock in"
provision and based on a fixed share price of GBP1.28, being the
volume weighted average price for the 90 days prior to completion.
The balance of GBP2.0m will be paid in cash. iomart will also repay
GBP3.7m of debt acquired on completion.
The Acquisition also includes a further GBP4.0m to GBP7.0m of
contingent earn-out payments which are calculated based on
Extrinsica's profitability for the 12 months ending 31 March 2024.
Of any earn-out payment that becomes due, GBP1.0m will be satisfied
by the issue of iomart shares (the number of shares to be issued
will be based on the same share price as the initial
consideration). The amount of contingent consideration payable,
based on management's forecast, recognised at the date of the
Acquisition, is expected to be GBP4.0m.
The initial consideration, debt settlement and any earn out
consideration will be financed through a combination of existing
bank facilities and cash on the Company's balance sheet.
The vendors of Extrinsica include the existing management team,
amongst others. The largest shareholder is The Vale Retirement
Trust with c. 25% of all the issued share capital. This trust is an
investment vehicle for a high wealth individual who is not involved
in the management of the business.
Consideration shares
iomart has applied for admission of these new ordinary shares to
trading on AIM. Admission is expected to take place at 8.00am on 8
June 2023.
The Company's total issued share capital following admission
will consist of 112,136,031 ordinary shares of 1 pence each with
one voting right per share. There are 140,773 Ordinary Shares in
the iomart Group plc Employee Benefit Trust and the Company holds
none of its Ordinary Shares in treasury. Therefore, the total
number of voting rights in iomart is 111,995,258
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
share capital of the Company under the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules.
Reece Donovan, CEO of iomart Group plc, commented:
"We are delighted to welcome the Extrinsica team to iomart,
providing a large step forward in iomart's capabilities to support
existing and new customers in their use of Microsoft's Azure cloud
platform. Simon and the team have been at the forefront of the
market developments of Azure since 2017 and have deep skills and
expertise in this in-demand area of cloud computing, which will
accelerate the initial investments we have made in our own
Microsoft resources and capabilities.
This is a meaningful step in our strategy as we position the
Group for its next phase of growth as a leading secure hybrid cloud
business."
Simon Smith, CEO of Extrinsica, commented:
"Joining iomart marks an exciting phase for our highly skilled,
experienced and ambitious team, providing us with a strengthened
platform for growth. It allows us to leverage joint capabilities,
capitalise on our understanding of the markets we operate in and
build upon our significant achievements to date.
iomart has a long pedigree in cloud infrastructure, an
impressive customer base and a growth strategy which I believe
positions iomart well for future success. The team and I are all
incredibly excited to be working as part of the wider group and
look forward to being a key part of driving iomart's ongoing
success."
For further information:
iomart Group plc Tel: 0141
931 6400
Reece Donovan, Chief Executive Officer
Scott Cunningham, Chief Financial Officer
Investec Bank PLC (Nominated Adviser and Broker) Tel: 020 7597
4000
Patrick Robb, Virginia Bull, Nick Prowting
Alma PR Tel: 020 3405
0205
Caroline Forde, Hilary Buchanan, Joe Pederzolli
About iomart Group plc
iomart Group plc (AIM: IOM) is a cloud computing and IT managed
services business providing hybrid cloud infrastructure, network
connectivity, security, and digital workplace capability. Our
mission is simple: to make our customers unstoppable by enabling
them to connect, secure and scale anywhere, anytime. From our
portfolio of data centres we own and operate across the UK to
connected sites around the world, our 400-strong team can design
and deploy the right cloud solution for our customers.
For further information about the Group, please visit www.iomart.com
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END
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