15th Jun 2016 07:13
LONDON (Alliance News) - Daily Internet PLC Wednesday said it had entered into a conditional deal to buy System Professional Ltd for up to GBP5.8 million, after which it intends to change its name to SysGroup PLC, and set out plans to undertake a share consolidation and capital reduction.
Daily Internet will pay an initial GBP3.9 million for System Professional, to be satisfied by GBP3.3 million in cash and the issue of 975,000 shares, and a further contingent consideration of up to a maximum of GBP1.9 million based on performance.
System Professional is a managed services and IT consultancy services provider, offering strategic advisory services to public and private sector clients.
It has also proposed a capital reorganisation consolidating every 40 existing shares into one new ordinary share.
The company has raised GBP5.0 million in a placing of 8.3 million shares at a price of 60 pence per share, following its proposed capital reorganisation, equating to 1.5 pence per share, a 10% discount to its last closing middle market price per existing share.
Shares in the company were down 3.0% at 1.60 pence.
Additionally, a further 1.17 million shares, or a 9.2% stake in the company, were sold at the same price by former chief executive officer Abby Hardoon and a former employee, Stuart Gibson.
The funds will be used for the initial consideration of the acquisition and for general working capital.
"We are delighted to announce the transformational acquisition of Sys-Pro and are looking forward to working with the Sys-Pro team. As well as being immediately earnings enhancing it will greatly strengthen our core Managed Services business in terms of scale and capability. This will enable us to better exploit the ongoing market shift toward cloud delivered services and accelerate our growth. In addition, synergies and our increased scale are expected to reduce combined incremental costs going forward," said Chief Executive Officer Chris Evans in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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