REG-Pinnacle Telecom Grp Acquisition
Released: 11/06/2009
com:20090611:RnsK7178T
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RNS Number : 7178T
Pinnacle Telecom Group PLC
11 June 2009
Pinnacle Telecom Group plc ("Pinnacle" or "the Company")
Acquisition of Accent Telecom UK Limited ("ATUK" or "Accent") and its interests
in associated companies ("the Associated Companies")
Pinnacle Telecom Group plc, the Scottish based provider of integrated
telecommunication solutions and services, is pleased to announce it has acquired
the entire issued share capital of ATUK, a telecommunications reseller based in
Northampton, through its subsidiary Pinnacle Telecom plc.
The acquisition of ATUK was for a consideration of £661,450 satisfied by the
issue of 508,807,826 shares at 0.13 pence per share, being the mid-market price
at the close of business on 9th June 2009. Following admission of the new shares
to trading on AIM, which is expected to take place on 12th June 2009, Pinnacle
will have 1,702,907,630 shares in issue.
About Accent
ATUK provides telecommunications services, including fixed line and mobile, to
business customers both directly and indirectly through a dealer network. Accent
owns 30% of the equity of two independent resellers who trade under the Accent
brand: Accent Telecom North Limited ("ATN") based in Stockton on Tees, and
Accent Telecom South Limited ("ATS") based in Middlesex, which exclusively sell
Accent's services into the SME market.
ATUK also owns 40% of the issued share capital of Stripe 21 Limited, a fast
growing network solutions business based in Dorking, Surrey which provides
state-of-the-art IP based business services to SMEs and corporates. In addition,
ATUK owns 33% of CityX Limited, which seeks to provide high quality voice over
broadband services to multi-sited businesses.
Based on its unaudited management accounts, in the year ended 31st March 2009,
ATUK had a turnover of £3,522,430 (2008: £2,454,956), operating profit of
£17,484 (2008: £29,935) and retained profit of £9,922 (2008: £22,103). At 31st
March 2009, ATUK had net assets of £330,570 (2008: £270,648) and no debt other
than the sum of £42,189 (2008: £54,109) relating to equipment leasing. On
acquisition it is likely that the Company will re-evaluate the balance sheet
carrying value of the ATUK interest in the Associated Companies. At 31st March
2009 these interests had a carrying value of £223,070. ATUK has no contractual
obligation to fund any of the associated companies.
Darron Giddens, the founder director and the other major shareholder, Paul
Goodland, have been instrumental in building the Accent business and both will
remain with ATUK.
Rationale for the acquisition
The services provided by ATUK are highly complementary to the telecommunications
focus of Pinnacle. When coupled with the benefit of Pinnacle's supply
arrangements following integration of the companies, the Directors believe that
there will be material benefits to the profitability of the ATUK business which,
like Pinnacle, is mainly based on recurring income streams. The acquisition
brings with it an established base in the Northampton area allowing the Company
to further expand its operations outside Scotland.
There are also a number of additional key benefits:
* Accent is experienced in selling a broad range of converged voice and data
solutions, including hosted telephony (VoIP).
* The acquisition delivers customers into which Pinnacle can cross-sell its
products.
* Accent has a track record of selling mobile solutions to businesses.
* The acquisition brings additional revenue (£3.5m in the 12 months to 31st
March 2009).
* Similar cultures exist between Accent and Pinnacle, which will help rapid
integration.
* The Accent founder and CEO has served previously on an AIM company board.
The Directors believe that this is a pivotal transaction for the Company. It
will materially increase group turnover, and give the enlarged business greater
scale and wider geographic coverage. Creating a business of substance remains a
key objective of the Board.
Commenting today Alan J Bonner, Chief Executive of the Company, said:
"I am delighted that we have completed this acquisition. Accent Telecom has an
excellent team of people and its business is highly complementary to Pinnacle,
giving us a solid base of customers across the UK and, through Stripe 21
Limited, interests in a range of next generation IP solutions, which will help
us better utilise our capability as a public telecommunications operator. The
acquisition also brings us additional depth of experience in the
telecommunications business led by Darron Giddens, the Accent CEO who is a
qualified accountant and, until mid 2002, was the Finance Director of IDN
Telecom plc, a previous AIM listed company that was sold to Redstone plc in
early 2007.
We are looking forward to working with Paul Goodland and Darron Giddens and our
intention is quickly to integrate the two businesses. Cross-selling multiple
services to our customers is a key feature of our strategy which will be
enhanced by this acquisition. We intend to build on our strategy of expanding
the Company through bolt-on opportunities, thereby enhancing our services to
customers as well as strengthening our organic growth capabilities."
11th June 2009
Enquiries:
Pinnacle Telecom Group plc
Alan J Bonner, Chief Executive Tel: 0845 119 2100
Zeus Capital
Ross Andrews Tel: 0161 831 1512
Bobby Fletcher
This information is provided by RNS
The company news service from the London Stock Exchange
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