Mxc Capital Share Discussion Threads

[koolervanme] 04/1/2016 14:57

A better deal for MXCP than it for CSI.

25% of the company, their man on the BOD plus all advisory fees every step of the way for all ongoing acquisitions plus warrants to boot.

[koolervanme] 04/1/2016 14:55

Castle Street Investments has struck a £34.8 million deal to buy an IT and cloud services firm.

The Edinburgh-based investor, formed by chairman Bill Dobbie following the sale of the Cupid online dating business, said it has raised £30 million through an oversubscribed share placing to help fund the acquisition of Selection Services Investments.

Talks over the possible takeover were unveiled by Castle Street on Christmas Eve. The deal will see technology-focused investment MXC Capital take a 24.9 per cent stake in Castle Street, with MXC partner Andy Ross becoming its chief executive.

Bill Dobbie has mystery acquisition in his sights

Ross said: “The smaller end of the IT services sector is highly fragmented providing an exceptional opportunity for a buy-and-build platform focusing on IT solutions and cloud services. The combination of a strong balance sheet, the new management team we are building and MXC’s proven track record in the sector is a powerful one that will set us apart and presents a great opportunity to deliver value for shareholders.”

Selection has more than 500 active customers and generates £35m in revenues, Castle Street said.

The acquisition is subject to approval at a shareholder meeting to be held in London on 20 January.

Dobbie said: “It has been our stated investment strategy to seek investment into a profitable and cash generative business with an experienced management team, good revenue visibility and growth opportunities. We believe that in Selection we have identified a business that meets these criteria and look forward to an exciting future.”

Read more:

[koolervanme] 04/1/2016 14:47

hxxp://www.selection.co.uk

hxxp://www.selection.co.uk/clients/

[koolervanme] 04/1/2016 14:46

MXC Capital (the sponsors of TechMarketView’;s Little British Battler programme) is backing a new ‘Buy and Build’ in the IT Services arena.

The basics

Back in 2005, Easydate, ‘a casual dating service’, was admitted to AIM. They were rebranded in 2011 as Cupid. The dating activities were sold in 2013 realising some £38.6m. Cupid was renamed Castle Street Investments retaining its AIM listing and with cash of c£22m.

Selection Services is a 25 year old IT services company with revenues of c£34.5m and EBITDA of £3.3m (to June 15). Based in Bromley, Selection employs c300 personnel and service over 500 clients in the UK. In 2011 Palatine backed an MBO. Selection is what we would describe as a ‘vanilla services company’ with no major IPR or niche specialisation. Instead they offer a full range of Managed Services, Cloud transition and Project development – specifically to SMEs in the UK. Around 30% of their revenues come from ATOS.

The deal

Today it was announced that Castle Street Investments was acquiring Selection for an enterprise value of £34.8m (1x revenues). £30m has been raised in an over-subscribed placing. MXC Capital, who originated the deal, will have a 24.9% stake.Ross

The people

Andy Ross, currently a Partner at MXC who was CEO of Northgate Managed Services for 9 years but left just before in Feb 13 Capita acquires Northgate Managed Services at knockdown price, will become the CEO of the new business joined by Julian Phillips as CFO (was CFO at Northgate Managed Services with Andy).

The objective

I’ve just had the opportunity to speak with Ross and Marc Young from MXC. Rather than looking back at what Selection was in the past, I see this more as a vehicle where the drivers are the most important part of the story. Clearly there is a requirement in the market for a full IT service house that can take SMEs on the journey that they will all need to take into the Cloud (be it private or public) – embracing data centres, network services, Cloud and all associated support services There are actually very few companies that address that part of the market – mainly because historically it has been difficult to make any money from it. So the larger players tend to concentrate of the larger deals/clients. Indeed, just like ATOS, preferring to partner with companies like Selection in the SME part of the market.

MXC have proved to be very good at the ‘Buy and Build’ model and that’s exactly what I expect them to do at Selection. I think we can expect a series of acquisitions coupled with the inevitable ‘cost savings’ boosting margin. In this regard, Selection starts off with a very healthy balance sheet. £16.5m cash available and up to an addition £19m of credit available when/if required.

Selection is now very clearly on our radar and we expect to report the kind of news flow - and performance - that we have come to expect from MXC backed businesses.

[mr roper] 04/1/2016 10:25

starting to wake up now..nice.

[mr roper] 04/1/2016 08:27

great news today.

[2 chim bans zees] 30/12/2015 22:40

You guys still following Crocodile Chimers?

[mysteronz] 19/12/2015 08:15

Given the veery low investment (so far) in PINN then no.

[busterdog2] 16/12/2015 19:16

I half expected to see Mxcp tracking pinn's rise? Should it be?

[mr roper] 15/12/2015 14:59

10 for 1 would give about 300m shares. That would be about right. Best get the share price to 5p first though..Look a lot nicer at 50p than 32p..

[moormoney] 15/12/2015 14:49

Any guesses on consolidation figures? Maybe 1 in 100 but not yet IMO.

[leedsu36] 15/12/2015 11:34

Lovely news,such confidence when the gaffers pay themselves in shares,huge trades the other day boosting Marc Youngs sipp by 7.5m....and 9.5m to P Rigg
Paul Gilbert happy to be paid in shares also,it's prepare yourselves for consolidation time.

Many happy returns and all systems go.

[muffster] 15/12/2015 08:41

No movement in price despite volume pick up

[moormoney] 14/12/2015 23:21

Look at that volume chart! Woken up with a vengeance...I hope we are about to move up!

[jayfella72] 14/12/2015 16:18

Chunky buys 34 million! !!

[mr roper] 07/12/2015 08:16

Gavin Lyons appointed as PINN Chairman.

[mr roper] 01/12/2015 14:58

Indeed, CTP has thrived post consolidation. I suspect the same may happen here.

[sheaton] 01/12/2015 13:49

This has not harmed CTP's share price, despite all the doomsayers comments prior to the consolidation.

[mr roper] 01/12/2015 12:35

With the huge amount of shares in issue I wouldn't be surprised to see a consolidation in 2016. Perhaps 10 for 1 or 5 for 1.

[muffster] 01/12/2015 12:16

Thanks all. Very compelling and bought again, as well as old fave MTI, that has huge potential.

[sheaton] 01/12/2015 11:37

Buys are all showing as sells.

Stunning opportunity in my view.

The results released today are excellent and bode well for the future.

[muffster] 01/12/2015 11:37

Ah thanks, stockopedia has 62.7 million mkt cap

[cockerhoop] 01/12/2015 11:30

Current Market Cap is approx £102m according to SharelockHolmes

3165m share @ 3.25p.

[muffster] 01/12/2015 11:18

Am I missing something or is this really a stunning buying opportunity?It is effectively an investment trust, generating 5.7million pre tax profit and investments valued at 61million, with 24 million cash?Market cap 63 million?