GX Networks PLC
28 August 2003
Press Release 28 August 2003
GX Networks plc
('GX Networks' or 'the Company')
Acquisition of Firstnet Services Limited ('Firstnet')
Institutional Placing of 261,894,737 New Ordinary Shares raising £12 million
GX Networks plc, the telecoms network operator and provider of business
broadband solutions, has acquired Firstnet Services Limited for a total
consideration of £4.3 million and has effected a successful institutional
Placing raising £12 million (net).
Leeds-based Firstnet Services Limited was founded in 1996 and provides hosting,
leased lines, DSL, WDSL, and connectivity services to a range of SME customers.
During the year ended 31 August 2002 the turnover attributable to the business
of Firstnet being acquired by GX Networks was approximately £7.4 million and the
attributable EBITDA was £1.1 million. The value of the net assets at that date
being acquired was approximately £4.0 million. The acquisition of Firstnet is
being satisfied by a cash consideration of £3.2 million and £1.1 million in
Ordinary Shares of 1p each in GX Networks at a price of 4.98p, which will be
allotted no sooner than seven months following completion.
Firstnet's data centre in Leeds further enhances GX Networks' market position in
the North of England and provides an additional 20 points of presence (PoPs).
This transaction takes GX Networks SME customer base to more than 20,000.
Commenting on the acquisition, Grahame Purvis, Chairman and Chief Executive of
GX Networks plc, said: 'Firstnet brings further diversification to GX's product
range including additional hosting capacity and wireless product. The Company
will be integrated as seamlessly as possible, together with XTML Limited and
Compulink Information eXchange Limited which we acquired in July.'
In addition to the acquisition of Firstnet Services Limited, GX Networks has
raised £12 million (net) by way of a placing with institutional and other
investors, underwritten by Collins Stewart Limited, of 261,894,737 million
shares at a placing price of 4.75p. It is expected that the New Ordinary Shares
the subject of such placing will be admitted to trading on the Alternative
Investment Market on Tuesday 2 September 2003. The proceeds of the Placing will
be used to strengthen the Company's balance sheet and to enable the Company to
continue with its stated acquisitive strategy.
Peter Dubens, Executive Vice Chairman of GX Networks plc, said: 'GX has been
created out of the consolidation of now five alternative network businesses and
benefits from the huge historic capital investment made into these companies.
Each of our acquisitions has added to our portfolio of products that we sell and
the quantity of customers that we sell to, from 600 in December 2001 to over
'Similarity in the structure of these companies has allowed GX to streamline the
cost base with each acquisition and has limited our requirements for capital
- Ends -
For further information:
GX Networks plc
Peter Dubens, Executive Vice Chairman Tel: +44 (0) 20 7766 6909
Stuart Lane, Corporate Finance Tel: +44 (0) 20 7523 8310
Henry Harrison-Topham / Julian Bosdet Tel: +44 (0) 20 7444 4141
Notes to editors:
GX Networks plc is a telecoms network operator and provider of business
broadband solutions. The Company is listed on the Alternative Investment Market
(AIM) and prior to March 2003 was known as Zipcom plc.
Zipcom was listed on AIM in July 2000 and acquired Transigent, the holding
company for GX Networks, in October 2002. The company changed its name to GX
Networks Plc in March 2003.
GX Networks independently owns and operates one of the most extensive, secure
and resilient national networks. With its own dedicated data-centres, located
in Central London, Manchester and Leeds, GX Networks can rapidly deploy Internet
hosting solutions. GX Networks acquired the conferencing, ISP and hosting
businesses of Telenor Business Holdings UK Limited Group in July 2003.
This information is provided by RNS
The company news service from the London Stock Exchange