RedstoneConnect PLC Acquisition (4029P)
November 17 2016 - 1:01AM
UK Regulatory
TIDMREDS
RNS Number : 4029P
RedstoneConnect PLC
17 November 2016
17 November 2016
RedstoneConnect Plc
("RedstoneConnect" or the "Group")
Acquisition of Commensus for GBP2.4 million
RedstoneConnect (AIM: REDS), a leading provider of technology
and services for smart buildings and commercial spaces, is pleased
to announce the acquisition of the entire issued share capital of
Commensus Plc ("Commensus") for a total consideration of GBP2.4
million (the "Acquisition").
Commensus is a leading provider of fully managed IT support
services internationally with a product offering that is highly
complementary to RedstoneConnect's existing IT services and
software offerings.
Highlights
-- Expected to be earnings enhancing in its first full year of
ownership - in the financial year ended 31 December 2015, Commensus
generated revenues of GBP3.2 million and EBITDA of GBP338,000
-- Established, profitable and scalable managed services
business platform currently servicing 72 customers globally
-- Highly experienced management team and staff comprising of 19 employees who will support RedstoneConnect's existing managed services capabilities
-- Broadens RedstoneConnect's existing suite of managed IT
solution services, providing further opportunity to cross-sell to
RedstoneConnect's existing clients
Acquisition rationale
Strategic acquisitions are a core part of RedstoneConnect's
growth strategy and the acquisition of Commensus broadens the
Group's product and service set as well as providing a
complementary fit to both of the Group's key existing trading
divisions - Redstone and Connect IB.
Commensus is a well-established IT end-to-end managed services
provider, servicing 72 clients globally, providing 24-hour network
support, infrastructure and communications. The Acquisition will
enable the Group to offer a cloud-hosted IT services solution
alongside Redstone's existing 'on-the-ground' managed IT services,
providing both new and existing clients with broader and more
flexible solutions.
Commensus will also support Connect IB's software offering as it
will allow Connect IB to host the software solutions delivered to
its clients through the Commensus platform as well as enabling
Connect IB's digital platform, Connect, to be hosted on Commensus.
This is expected to accelerate the Group's ability to offer a
complete end-to-end software service suite without the need to
engage third parties.
The acquisition of Commensus is directly in-line with
RedstoneConnect's ambition of developing greater levels of
contracted recurring revenues to deliver a stronger mix of
business, incorporating higher margin recurring revenues and
greater visibility of earnings.
Terms of the Acquisition
The total consideration payable for Commensus is GBP2.4 million
of which GBP2,252,290 is payable in cash, funded from our own
resources and bank debt, and GBP147,710 is to be satisfied by the
allotment and issue of 11,976,487 ordinary shares in
RedstoneConnect to Kevin London and Alex Parker, both senior
management of Commensus ("Consideration Shares"), on completion.
The Consideration Shares being issued will be subject to lock up
and orderly market arrangements for 24 months.
Mark Braund, CEO of RedstoneConnect, commented:
"This earnings enhancing acquisition is directly in-line with
our strategy to broaden our managed services solutions and to
accelerate the Group's transition to high-margin recurring annuity
based revenues. Commensus will enable us address a gap in our
existing services offering in our RedstoneConnect business.
"RedstoneConnect has undertaken a significant shift in both
strategic and operational direction over the last 12 months and the
acquisition of Commensus is further evidence of our ambitions to
deliver compelling service solutions across our client base."
Application has been made for the Consideration Shares to be
admitted to trading on AIM ("Admission") and it is expected that
Admission will become effective on 22 November 2016.
Following the issue of the Consideration Shares, there will be
1,645,146,151 ordinary shares in issue. The Group does not hold any
ordinary shares in treasury and therefore 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
Group under the Financial Conduct Authority's Disclosure and
Transparency Rules.
Enquiries
RedstoneConnect Plc via Vigo Communications
Mark Braund (CEO)
Spencer Dredge (CFO)
Cantor Fitzgerald Europe (Nominated
Adviser & Joint Broker)
Marc Milmo/Phil Davies/Catherine +44 (0)20 7894
Leftley/Callum Butterfield 7000
Whitman Howard Limited (Joint Broker) +44 (0)207 659
Nick Lovering 1234
Vigo Communications (Financial
Public Relations)
Jeremy Garcia / Ben Simons / Antonia
Pollock +44 (0)20 7830
reds@vigocomms.com 9700
About RedstoneConnect Plc
RedstoneConnect is focused on technologies that make real estate
more efficient and businesses more effective. Its businesses,
Redstone and Connect IB, provide the infrastructure capabilities
and the software applications to deliver smart building and smart
workspace solutions for commercial businesses, public sector
organisations, real estate owners and managers. Visit our website
at www.redstoneconnectplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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