MXC Capital Limited Lead Investor and Advisor to Pinnacle Technology (8243M)
January 25 2016 - 2:00AM
UK Regulatory
TIDMMXCP TIDMPINN
RNS Number : 8243M
MXC Capital Limited
25 January 2016
25 January 2016
MXC Capital Limited
("MXC" or the "Company")
Lead Investor and Advisor to Pinnacle Technology Group plc on
GBP4.5m fundraising and Acquisitions
MXC is pleased to announce that it has agreed to cornerstone a
placing of new ordinary shares in Pinnacle Technology Group plc
("Pinnacle") (the "Placing"), in conjunction with Pinnacle's
proposed acquisitions of Ancar-B Technologies Limited ("Ancar-B")
and Weston Communications Limited ("Weston") (the
"Acquisitions").
Highlights:
-- Acquisition of Ancar-B for a consideration of GBP3.5 million
-- Ancar-B is a provider of IT support services to SMEs
-- Circa 315 customers generating revenue of GBP2.2m (59% recurring) and an EBITDA of GBP0.57m
-- Based in Leeds
-- Acquisition of Weston for a consideration of GBP1.5 million
-- Weston is a provider of telecoms and IT support services to SMEs, councils and universities
-- Circa 225 customers generating revenue of GBP2.8m (59% recurring) and EBITDA of GBP0.22m
-- Based in Leeds
-- Acquisitions create the hub for centralised support functions
-- Opportunity exists to consolidate a highly fragmented market
of smaller IT services companies to become a provider of 'IT as a
service' to the SME market in the UK
-- Longer-term strategy to complete further acquisitions and drive synergies
-- Gavin Lyons, partner in MXC Capital, will lead the strategy as Executive Chairman
-- MXC Capital originated both acquisitions and is acting as
cornerstone investor in GBP4.5 million equity placing, subscribing
for GBP2.1 million of equity at a price of 4.2 pence per Pinnacle
share and will own 25% of issued share capital upon completion of
the Placing and Acquisitions
Pinnacle's results for the year ended 30 September 2015 showed
an EBITDA loss of GBP0.6 million. The ongoing losses and cash burn
of Pinnacle show that the business is in need of a change of
strategy. The Board of Pinnacle believes that an opportunity exists
to re-focus the business on higher margin services through a buy
and build strategy. The market of smaller, sub-scale IT services
providers is highly fragmented, providing ample consolidation
opportunities in order to become a provider of 'IT as a service' to
the SME market in the UK.
Peter Rigg, Chairman of MXC, said: "Pinnacle has a number of
operating challenges to address but this is where MXC can use its
experience and skills to re-focus the business and bring it back to
profitability. The new funding and two acquisitions are the first
steps in this journey and represent the start of a longer term
strategy to complete further acquisitions and drive synergies
."
The Placing and Acquisitions are conditional upon, inter alia,
the passing of resolutions by shareholders of Pinnacle at a general
meeting to be held on 10 February 2016, with admission of the
enlarged share capital to trading on AIM expected on 11 February
2016. For the year ended 30 September 2015 Pinnacle generated a
loss before tax of GBP1.4 million. As at 30 June 2015, it had net
assets of GBP0.4 million.
The circular containing further details of the Acquisitions and
Placing can be found on Pinnacle's website:
www.pinnacletechnology.co.uk
MXC Capital Limited
Marc Young
+44(0)20 7965 8149
Zeus Capital Limited (Nominated adviser and broker)
Nick How
+44 (0)20 3829 5000
Alma PR
Josh Royston / Hilary Buchanan
+44 (0)7780 901979/+44 (0) 7515 805218
About MXC Capital (www.mxccapital.com)
MXC is a specialist merchant bank with a track record of
investing in and advising companies in the TMT sector. We bring
together a deep knowledge of technology, first-hand experience of
managing companies in the sector, an ability to make meaningful
investments and a highly experienced corporate advisory team in
support, all of which we combine to grow shareholder value.
This information is provided by RNS
The company news service from the London Stock Exchange
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