SysGroup PLC Acquisition of Rockford IT (2156V)

TIDMSYS

RNS Number : 2156V

SysGroup PLC

01 November 2017

1(st) November 2017

SysGroup plc

("SysGroup" or the "Company" or the "Group")

Acquisition of Rockford IT

SysGroup PLC (AIM: SYS), the managed IT services and cloud hosting provider, is pleased to announce that it has today acquired 100% of the issued share capital of Rockford IT Ltd ("Rockford"), a specialist provider of Managed IT, Hosting and Security Services (the "Acquisition"). The Board expects the acquisition to be immediately earnings enhancing.

The total consideration for the Acquisition is GBP3.9m in cash (on a cash-free/debt-free basis). Of the total consideration GBP1.0m is being deferred for a maximum period of 120 days whilst the vendors assist with a pre-agreed handover and integration of Rockford into the Group's existing operations.

Information on Rockford IT

Based in Telford and established in 2001, Rockford provides managed hosting services, 24/7 IT service desk, IT security, connectivity services and disaster recovery solutions to a diversified base of approximately 200 customers consisting of SMEs, local authorities, education organisations, professional services and blue chip customers within the UK. Rockford's technical capabilities and qualified sales staff have enabled the company to become the first in the UK to gain WatchGuard Platinum Partner status, in 2015, and it is now one of only two Platinum Partners. This privileged status enables Rockford to be a "one stop shop" solution provider of WatchGuard's extensive portfolio of IT related security products and services.

The company is profitable and delivered a 129% increase in turnover from 2014 to 2017. For the 12 months ended 31 July 2017 Rockford reported unaudited revenues of GBP4.45m generating adjusted EBITDA of GBP0.78m and profit before tax of GBP0.43m. The company had net assets of GBP0.63m. Adjusted EBITDA is stated after adding back underlying costs that will not recur post acquisition.

Financing of the Acquisition

The Acquisition and associated transaction costs are being financed from SysGroup's existing cash resources and bank facilities. The Group will draw down a total of GBP2.0m from the Group's GBP2.5m acquisition facility with Santander.

Chris Evans, Chief Executive of SysGroup, commented: "The acquisition is in line with our strategy, supplementing our organic growth whilst enhancing our services portfolio and providing cross selling opportunities for products and services. Rockford further solidifies our presence in existing markets and also expands the Group into new verticals such as hotels and leisure.

"The market for managed IT services remains highly fragmented and ripe for consolidation. We believe that this acquisition enhances our position to capitalise on the substantive market opportunity available. We would like to welcome the Rockford team into our Group and we look forward to leveraging our newly combined and deeper skills to further our organic growth."

For further information please contact:

 
 SysGroup plc                       Tel: [phone] 
  Chris Evans, CEO 
  Julian Llewellyn, CFO 
 Shore Capital (Nomad and Broker)   Tel: [phone] 
  Edward Mansfield/Anita Ghanekar 
 Alma PR (Financial PR)             Tel: [phone] 
  Josh Royston / Hilary Buchanan 
  / Helena Bogle 
 

About SysGroup

SysGroup is a leading provider of Cloud Hosting, Managed Services and expert IT Consultancy. The Group delivers solutions that ensure clients understand and benefit from industry-leading technologies and advanced hosting capabilities. The SysGroup team focuses on a customer's strategic and operational requirements - enabling them to free up resources, grow their core business and avoid the distractions and complexity of delivering IT services.

The Group has offices in Liverpool, Coventry, Telford, London and East Sussex.

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

This information is provided by RNS

The company news service from the London Stock Exchange

END

ACQUGGCPGUPMUQG

(END) Dow Jones Newswires

November 01, 2017 03:00 ET (07:00 GMT)