iomart acquires Easyspace
iomart Group plc ("iomart" or "the Company") announces that it has acquired the entire issued share capital of Easyspace Limited ("Easyspace") for a total consideration of £12.0 million.
Easyspace is a provider of domain name and web hosting services with 300,000 live domains and 140,000 customers of which 40,000 are hosting customers. In the year ended 31 December 2003, Easyspace generated an operating profit of £1.8 million from revenue of £5.0 million with a gross margin of 71%. In the six months ended 30 June 2004, it is estimated that the company generated an operating profit of £1.2 million from revenue of £2.8 million with a gross margin of 71%. Easyspace is based in Surrey and was established in 1997. It currently employs 15 staff.
The acquisition will significantly enhance the scale and profitability of iomart internet limited and follows the acquisitions of Internetters and Nicnames which have now been successfully integrated into this division and are performing ahead of budget. The directors plan to expand iomart’s sales force in order to offer additional products and services to Easyspace’s customer base. They also
plan to reduce Easyspace’s cost base by about £1.0 million over the course of the next 18 months.
Of the total consideration, £6.25 million has been satisfied by the issue of 11,574,075 new Ordinary Shares of 1 pence each which have been placed on behalf of the Easyspace vendors by KBC Peel Hunt Ltd at a price of 54p per share with both existing and new institutional and other investors. The balance of the consideration, which is payable in cash on completion, has been financed as
follows; £4.50 million from new bank facilities provided by Bank of Scotland and £1.25 million from the Company’s existing cash resources. On acquisition, Easyspace is expected to have net cash balances in excess of £1.50 million.
Nick Kuenssberg, Angus MacSween, Sarah Haran and Fred Shedden, all directors of iomart, have subscribed for new ordinary shares under the terms of the placing at a price of 54p each, details of which are set out below:
Nick Kuenssberg 46,000
Angus MacSween 440,500
Sarah Haran 9,500
Fred Shedden 46,000
The 11,574,075 new ordinary shares being placed on behalf of the vendors of Easyspace will rank parri passu with all other ordinary shares now in issue. Application has been made for these shares to be admitted to trading on AIM and such admission is expected to occur on 9 September 2004.
Angus MacSween, Chief Executive, commented "The acquisition of Easyspace is a significant development for iomart and supplements the organic growth of the division which has been adding new customers at an average of more that 1,200 per month since April. With a current total of 185,000 customers following this acquisition, the company looks to consolidate its position in the webservices market. "Subscribe to RSS Feed