Acquisition of RMS Managed ICT Security Ltd
10 October 2011
Pinnacle Telecom Group plc ("the Company")
Acquisition of RMS Managed ICT Security Limited
Pinnacle Telecom Group plc (AIM: PINN), the provider of cloud based technology solutions, is pleased to announce, through its subsidiary Pinnacle Cloud Solutions Ltd ("Pinnacle"), it has acquired the entire share capital of RMS Managed ICT Security Limited ("RMS"), a leading provider of IT security software and consultancy solutions to the mid-market and public sector.
Highlights
Ý The acquisition of RMS provides IT security expertise, a key part of Pinnacle's strategy to build out its of its cloud services proposition.
Ý Staffordshire base strengthens Pinnacle's reach across the UK.
Ý 1700 additional customers from mid-market to public sector.
Ý Strong cross-selling opportunities exist across the combined businesses.
Ý Acquisition ofRMS (previously the IT Security element of Redstone Managed Solutions) for a total consideration including professional fees of £468,301.
Deal Structure
1. At completion, the initial consideration of £25,000 satisfied in cash.
2. At completion, the issue of a two-year interest bearing convertible loan note for the value of £100,000 of ordinary shares of Pinnacle Telecom Group plc.
3. Deferred payments totalling £343,301 satisfied in cash between the 31st October 2011 and 25th December 2014.
Income Statement
RMS was incorporated in November 2010 and has not yet prepared full financial statements, however the unaudited management accounts for the nine month period ending 31st August 2011, shows the following financial performance:
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INCOME STATEMENT |
9 months ended |
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31-Aug-11 |
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£ |
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Turnover: |
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IT security products |
2,873,235 |
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Cost of sales: |
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Purchases |
(1,987,529) |
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Gross profit: |
885,706 |
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Administration costs |
(1,396,722) |
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Operating profit/(loss) before exceptional costs |
(511,014) |
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Exceptional costs |
(47,648) |
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Operating profit/(loss) |
(558,662) |
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Interest payable and similar charges |
(19,277) |
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Profit/(loss) before tax |
(577,939) |
The unaudited management accounts for the nine month period ended 31st August 2011 show that RMS had negative net assets of £567,939 (2010: Nil) including non-current liabilities greater than 12 months totalling £526,864.
Information about RMS
RMS was incorporated in November 2010 and started trading in early 2011 following a management buy-out of the security business from Redstone Managed Solutions Limited ("RMSL" - a division of Redstone plc). Based in Staffordshire, the company employs approximately 30 people across technical, sales, marketing and finance.
RMS connects, secures and manages large enterprises and organisations in both the private and public sector, and offers additional expertise in sustainability. RMS's solutions can span the entire IT infrastructure (increasingly cloud based) of its customers, ensuring that their businesses are connected efficiently and that data and information is available and securely protected.
RMS History
RMS's expertise in IT security comes from a 12-year successful security business track record. In September 2005 Redstone plc restructured into four autonomous operating units, one of which was RMSL, which specialised in providing managed IT solutions such as bespoke secure internet access, remote monitoring, back-up and hosting services along with application development and support.
In July 2006 Redstone plc completed the acquisition of the Tolerant Group of Companies, encompassing some of the UK's leading providers of Network Security Solutions. Tolerant was a Network Management, Monitoring, Analysis and Security Provider and had the exclusive rights to sell Computer Associates' anti-virus and anti-spyware products to larger businesses in the UK. As such, it enabled Redstone to offer an additional range of highly valued services to its customers in partnership with one of the world's largest IT management software providers. Tolerant was merged within RMSL to add network management, monitoring, analysis and security services to the Redstone business' portfolio.
In December 2010 Redstone plc announced it had sold the security business of RMSL to its management team under the new business of RMS.
RMS provides security software and consultancy solutions around the IT infrastructure of a client encompassing implementation, ongoing management, support and staff training. RMS has strategic partnerships with leading software vendors including McAfee, Computer Associates, Sophos, IBM, Websense, Kaspersky and Microsoft.
Commenting today Alan J Bonner, Chief Executive of Pinnacle Telecom Group plc, said:
"RMS connects, secures and manages large enterprises and organisations in both the private and public sector. We understand that the two greatest concerns for businesses embracing the move to cloud-based technologies are:-
1) Connectivity - i.e. what happens if I can't connect to my data and applications?
2) Security - i.e. how secure are my cloud-based applications and my data?
We are experts in connectivity; Since Pinnacle Telecom plc was founded in 1998, we have developed an excellent reputation, built over the last thirteen years, for the provision of flexible and innovative connectivity solutions. Most notably, we were selected for our expertise to successfully deliver connectivity to numerous high-profile events, including the UK General Election, the Pope's UK visit and the Royal Wedding of Prince William and Kate Middleton.
IT security is of the utmost importance and the acquisition RMS brings us IT security expertise, which is an essential element as the take-up of the cloud continues to move from early adopters to mainstream.
In summary, this is a fantastic acquisition for Pinnacle. We have continued to strengthen our IT capability over the last few months through a number of strategic acquisitions, this latest deal adds IT security expertise, it brings us around 1,700 customers from mid-market to public sector, it also brings us strategic partnerships with leading software vendors including McAfee, Computer Associates, Sophos, IBM, Websense, Kaspersky and Microsoft.
This acquisition has a significant impact on the group in terms of the revenues, opportunities and skills that it brings from outset. Following the ninety day integration period (where we are likely to see a number of one-off restructuring costs), we expect RMS to be earnings enhancing and very much in keeping with our strategy to build Pinnacle through bolt-on, well priced acquisitions.; thereby enhancing our services, particularly through the deployment of next generation, cloud-based solutions, as well as strengthening our organic growth capabilities.
Pinnacle goes from strength to strength and I will continue to search out additional well priced earning-enhancing acquisitions of this nature."
Enquiries:
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Pinnacle Telecom Group plc |
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Alan J Bonner, Chief Executive |
Tel: 0845 180 7474 |
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Zeus Capital Limited |
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Ross Andrews/Paul Horrocks |
Tel: 0161 832 1512 |
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Rivington Street Corporate Finance Limited |
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Jon Levinson/Peter Greensmith |
Tel: 0207 562 3389 |
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All Company announcements can be found at: |
www.pinnacletelecomgroup.co.uk
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About Pinnacle
Pinnacle Telecom Group plc (AIM: PINN) is a value added, solutions based provider of integrated telecommunications services including IP solutions. It focuses on the SME market across the UK, where it provides a wide range of communications solutions including telecommunications calls, access and consultancy, IT support, mobile solutions - both voice and data and hosted broadband voice services.
Pinnacle is a fully licensed Public Telephone Operator, has its own telephone network and interconnects with BT, Virgin Media and THUS. It has its own hosted voice (VoIP) platforms and engineers and owns Scotland's oldest ISP (and a founder member of Nominet), operating from its data centres in Glasgow, London and Brighton.
Pinnacle's strategy is to be a SME focused, value added, solutions based provider of next generation, cloud-based IP solutions, driven by leveraging organic opportunities as well as through targeted acquisitions. Pinnacle is seeking to acquire and grow businesses to bring together the four main elements of; traditional telephony, hosted cloud-based services, IT support and data centres. A particular target area is data centres, where the combination of recurring revenue and a platform to expand its hosted cloud-based services, would create a compelling earnings-enhancing proposition. A strategic acquisition in this area would potentially be transformational and as data centres are worldwide, it is widening the search parameters.
This information is provided by RNS
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