iomart Group plc (AIM:IOM), the managed hosting services company, is pleased to
announce the acquisition of the entire issued share capital of RapidSwitch
Limited for a total cash consideration of GBP5.25 million.
As a successful and profitable managed hosting company, RapidSwitch is an ideal
fit for iomart. The acquisition is in line with iomart’s strategy of becoming
the UK’s foremost hosting company, focused on the delivery of managed hosting
environments and solutions, be they virtual, dedicated, cloud or SaaS.
RapidSwitch is focused on delivering highly reliable managed hosted solutions
for its clients. RapidSwitch currently manages over 4,000 servers on behalf of
1600 clients ranging from SMEs through to large corporates. It has achieved
strong organic growth, via a high rate of repeat business and referrals, through
its well deserved reputation for excellent customer service.
RapidSwitch is delivering substantial revenue growth, having been recognised as
the 10th fastest growing technology company in the UK by Deloitte. Revenues of
GBP1.48 million for the year to March 2007 grew to GBP2.6 million for the year
to March 2008. A similar level of revenue growth has been achieved in the year
to March 2009.
The purchase of RapidSwitch provides iomart with a fifth data centre to add to
its existing portfolio of four operational datacentres. RapidSwitch’s data
centre, which is located in Maidenhead, Berkshire, is newly commissioned and
operational. When all phases of the build-out are completed it will give iomart
the capacity to accommodate a further 600 racks, as well as mitigating
substantial existing costs currently carried by RapidSwitch.
iomart expects the acquisition to be immediately earnings enhancing. The
acquisition of RapidSwitch is in line with iomart’s strategic objective to
expand its presence and capability in hosting and the Board of iomart believe
that the acquisition of RapidSwitch offers many benefits and opportunities
* The acquisition of a well established, profitable business with strong growth
* An immediate enhancement to earnings per share;
* An increased presence in hosting;
* A stand alone business with a strong brand; and
* Additional sales and profits with minimal increase in central and divisional
Of the total consideration of GBP5.25 million, GBP4.3 million was paid on
completion and a further GBP0.95 million is payable on 31 March 2010.
At 31 March 2008 the net assets of RapidSwitch were GBP530,012, EBITDA of
GBP761,418 and post-tax profits of GBP350,544. In addition RapidSwitch currently
has net debt of approximately GBP800,000.
Angus MacSween, CEO of iomart Group plc, stated: "iomart’s strong balance sheet
is the direct result of our recent disposal of a non-core directory business to
BT, which released cash to make strategic acquisitions. The market reaction to
our focus on the provision of managed hosting and data centre services has been
very encouraging to date, and we are convinced that our acquisition of
RapidSwitch at this stage in iomart’s evolution will accelerate growth
opportunities and profits for the Group."
For further information:
iomart Group plc | Tel. 0141 931 6400
Angus MacSween, Chief Executive
Ian Ritchie, Non-executive Chairman
KBC Peel Hunt | Tel. 020 7418 8900
ICIS | Tel. 020 7651 8688
Bob HuxfordSubscribe to RSS Feed