Pinnacle acquires IT-as-a-Service business

Last updated on: June 6, 2016, Author: R Sahota

 

Northampton headquartered Pinnacle Technology Group has bought  IT-as-a-service provider adept4 in a multimillion-pound deal backed by £5m funding from the Business Growth Fund (BGF), with executive chairman Gavin Lyons hailing the swoop as a “pivotal moment for Pinnacle as it completes the turnaround of the business”.

Pinnacle has acquired adept4 for an initial consideration of £4.5m in cash plus a deferred consideration of £1m payable in January 2018. A further consideration of up to £1.5m will be payable in March 2018 subject to hitting performance targets in the 2017 calendar year.

The acquisition was part-financed through the issue of £5m loan notes to the Business Growth Fund with an associated option to subscribe for shares at a price of 6p per share, representing a 43 per cent uplifting from the February placing price.

Pinnacle has also set out plans to change its name to adept4 plc.

In the 2015 calendar year, adept4 generated revenues of £5m and earnings before interest, taxes, depreciation and amortisation of £0.75m. Approximately 67 per cent of revenues are recurring.

Pinnacle said that adept4 has a strong management team, all of whom will remain in the business, with experience of both organic and acquisition growth. The newly acquired company has approximately 60 customers with average contract lengths of three to six years.

Lyons said: “This is a pivotal moment for Pinnacle as it completes the turnaround of the business which we set out to do in January 2016. Having executed five acquisitions and three disposals in just over four months, we have moved from a loss-making company with liabilities to a sustainable operational platform with healthy gross profit margins and high recurring revenues.

“Our focus is now on the integration of our acquisitions so that we can scale our asset-light, IT-as-a-service proposition we have for UK SME business. Our strategy remains the same and we will continue to focus on growing the company organically and through acquisition.”

Pinnacle also has offices in Dewsbury, Leeds and London. Meanwhile, adept4 is headquartered in Daresbury with additional offices in Brighton and Aberdeen.

 

Related Stories

vitispr