TIDMSYS
RNS Number : 3802E
SysGroup PLC
18 July 2016
18 July 2016
SysGroup plc
("SysGroup" or the "Company" or the "Group")
Disposal of SME Mass Market Business
and
Board Changes
SysGroup plc (AIM: SYS), the managed services and cloud
integrator, today announces the agreement to sell 100% of the
business and assets of its SME mass market business, operated by
Daily Internet Services Ltd ("Daily"), to a subsidiary of Host
Europe Group ("HEG") (the "Purchaser") for a total consideration of
circa GBP2.7m in cash, subject to adjustment (the "Transaction").
The Transaction is due to complete on Friday 22(nd) July 2016.
As a result of the Transaction, SysGroup's financial function
will be transferred to Liverpool. Julie Joyce, who has been the
Group's Chief Financial Officer since 2007, is based in Nottingham
at Daily's offices. Consequently, Julie has indicated to the Board
her desire to step down from her executive role in the Group. Julie
will therefore resign from the Board and her role as Chief
Financial Officer with effect from 15 August 2016. The Board is
pleased to announce the appointment of Michael Hogan as Chief
Financial Officer with effect from 15 August 2016. Julie will
remain with the Group until 31 January 2017 to ensure a smooth
transition.
Disposal of Daily's business
SysGroup has agreed the sale of its SME mass market business,
which comprises the brands Daily Internet, Evohosting and NameHog
to HEG for a total consideration of GBP2,735,727, subject to
adjustment in respect of advance receipts / payments with an
initial reduction of GBP465,519 resulting in a cash payment on
completion of GBP2,270,158.
The sale of the SME mass market business will enable SysGroup to
focus exclusively on the higher value Managed Services market in
line with the Company's stated strategy. The scale, capabilities
and reach of the Company's Managed Services business were recently
increased by the acquisition of System-Professional Ltd
("Sys-Pro").
For the year ending 31 March 2016 Daily generated revenues of
GBP2.25 million and adjusted EBITDA of GBP0.55 million.
The Group's current cash position following receipt of the
proceeds from the Transaction is GBP4.1 million. The cash position
takes into account the net proceeds of the recent placing but prior
an additional payment of excess working capital due to the vendors
of Sys-Pro, which is expected to be approximately GBP0.3m.
The proceeds from the sale of the SME mass market business will
go toward accelerating the integration of Sys-Pro into the Group,
driving organic growth within the Group as well as providing the
financial flexibility to undertake further acquisitions within the
Managed Services space.
Appointment of Michael Hogan as CFO
Michael Hogan joins the board of SysGroup as Chief Financial
Officer. Michael has over 10 years' experience working within the
technology sector in director level finance roles.
Michael began his career at KPMG where he gained valuable
industry experience on client secondments. In 2005 Michael was
appointed as CFO of Fasthosts Internet Group where he completed the
trade sale of Fasthosts to United Internet AG. Following his five
years at Fasthosts, Michael joined Livedrive Internet Limited as
Finance Director and managed the business through from start-up to
trade sale to j2 Global Inc. Before joining SysGroup, Michael
worked as Finance Director at UKFast.net Limited, a privately owned
managed hosting business and as CFO at Triptease Limited, a venture
capital backed business to business SaaS provider.
Departure of Julie Joyce as CFO and from the Board
Julie Joyce will step down as CFO and from the board of SysGroup
on 15 August 2016 and will leave the employ of the Group on 31
January 2017. The Board would like to thank Julie for her valuable
contribution over the years and services to the Group.
Chris Evans, CEO of SysGroup, commented: "We are delighted to
announce the appointment of Michael Hogan to our board. As CFO,
Michael will greatly strengthen our management capabilities and his
extensive transactional experience will be invaluable to SysGroup
as we continue to build our Managed Services business.
"The disposal of Daily is a significant development for the
Group, enabling us to focus our efforts on our core Managed
Services business, which recently underwent a transformational
expansion with the acquisition of Sys-Pro. The Managed Services
industry is undergoing rapid growth as organisations increasingly
seek cloud delivery of services. Dedicating our full focus on
Managed Services will therefore maximise our ability to capture
this growth going forward."
For further information please contact:
SysGroup plc Tel: 0151 559
Chris Evans, Chief Executive 1777
Shore Capital (Nomad Tel: 020 7408
and Broker) 4090
Bidhi Bhoma / Edward
Mansfield
Newgate Communications Tel: 020 7653
Bob Huxford / Adam Lloyd 9848
/ Ed Treadwell
Additional Information:
The following information is disclosed under Schedule 2 (g) of
the AIM Rules.
(i) Michael Peter Hogan is 45, is currently a director or partner of:
F.O.F Mill Quay Limited
Scribble Shack Limited
Michael Hogan has confirmed that there is no other additional
information to be disclosed under Schedule 2 (g) of the AIM
Rules
About SysGroup
SysGroup is a leading provider of Cloud Hosting, Managed
Services and expert IT Consultancy. The Group delivers solutions
that ensure clients understand and benefit from industry-leading
technologies and advanced hosting capabilities. The SysGroup team
focuses on a customer's strategic and operational requirements -
enabling them to free up resources, grow their core business and
avoid the distractions and complexity of delivering IT
services.
The Group has offices in Liverpool, Coventry, London and East
Sussex.
For more information, visit http://www.sysgroup.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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July 18, 2016 02:00 ET (06:00 GMT)