REG - SysGroup PLC - Acquisition of Independent Network Solutions Ltd

SysGroupAnnouncement

27/04/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220427:nRSa4451Ja&default-theme=true

RNS Number : 4451J  SysGroup PLC  27 April 2022

The information contained within this announcement is deemed by the company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of the domestic law of the United Kingdom
by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("UK
MAR"). Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

27 April 2022

 

SysGroup plc

("SysGroup" or the "Group")

 

Acquisition of Independent Network Solutions Limited

 

SysGroup plc (AIM:SYS), the multi award-winning managed IT services, cyber
security and cloud hosting provider, is pleased to announce the acquisition of
100% of the issued share capital of Independent Network Solutions Limited
("the Acquisition"), which trades as Orchard Computers ("Orchard"), a Bristol
based managed IT service provider.

 

Highlights

 ·             Acquisition of Orchard, a well-established managed IT services provider for
               £1.0m in cash.
               ·     Orchard generated unaudited revenues of £2.1m and EBITDA of
               £0.3m in the year to 31 December 2021.
 ·             The Acquisition will be funded from the Group's existing cash balance.
 ·             Orchard will further enhance the Group's presence in the South West region and
               will complement the operations based in South Wales.
 ·             The Acquisition is expected to be immediately earnings enhancing.

 

Acquisition

 

Information on Orchard

 

Bristol based Orchard has been in operation for over 30 years and has built a
loyal customer base totalling over 120 active clients in 2021, largely in the
South West of England. The average length of relationship amongst their 20
largest clients is 12 years, with no single customer representing more than 7%
of total revenues. Orchard represents customers across a broad range of
sectors, covering both the private and public sectors. Its managed IT service
offering mirrors that of SysGroup, providing high quality consulting services
and building tailor made, vendor agnostic solutions, designed specifically to
meet individual customer needs, followed by ongoing support. The Group
believes that Orchard will further strengthen SysGroup's presence in the South
West of England with the addition of more than 20 team members joining the
wider SysGroup team.

 

In the year ended 31 December 2021, Orchard generated revenues of £2.1m,
EBITDA of £0.3m and profits before tax of £0.3m. Recurring revenues in 2021
accounted for 56% of total income. Its net assets at 31 December 2021 were
£0.3m.

 

Acquisition terms

 

SysGroup has agreed to acquire 100% of the issued share capital of Orchard, on
a cash-free debt-free basis for a consideration of £1.0m in cash. The vendors
of Orchard, Ian Terry and Chris Patten, will remain with SysGroup for a
minimum period of three months to assist with the handover of customer
relationships and integration into the Group.

 

Adam Binks, Chief Executive Officer, commented:

"I am thrilled to be announcing our second acquisition of the financial year.
Orchard is a well-established, well-respected business with a loyal customer
base in the South West of England and I am delighted that we have been able to
bring this business into the Group.

 

"Our enhanced presence in the region will add even more value for the combined
customer base and will create a raft of opportunity for all of our team
members, including the addition of our 20 new colleagues from Orchard."

 For further information please contact:

 SysGroup plc                              Tel: 0151 559 1777

 Adam Binks, Chief Executive Officer

 Martin Audcent, Chief Financial Officer

 Zeus (Nominated Adviser and Broker)       Tel: 0161 831 1512

 Dan Bate

 James Edis
 Alma PR (Financial PR)

 Josh Royston                              Tel: 07780 901 979

 Matthew Young

 

 

About SysGroup

SysGroup is a leading provider of managed IT services, cloud hosting, cyber
security and expert IT consultancy. The Group delivers solutions that enable
clients to benefit from industry leading technologies and delivers managed
solutions with security, compliance and governance from the core. SysGroup
focuses on a customer's strategic and operational requirements - enabling
clients to free up resources, grow their core business and avoid the
distractions and complexity of managing IT services.

 

The Group has offices in Bristol, Edinburgh, Liverpool, London, Manchester,
Newport and Telford.

 

For more information, visit http://www.sysgroup.com

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQUNSWRUBUSUAR