iomart Group plc the provider of managed hosting, co-location and business continuity services announces the sale of its subsidiary Ufindus Limited (“Ufindus”), a leading internet directory services company to British Telecommunications plc (“BT”) for a total cash consideration of £20 million.
The decision to dispose of Ufindus followed a strategic review by the board, in which it became clear that the operation was non-core to iomart’s hosting and managed service strategy moving forward. After considerable interest from trade buyers, the decision was taken to find a new long term parent for Ufindus. Under the agreement iomart will continue to provide BT with web-hosting services for Ufindus.
Ufindus was founded by iomart in 2002 and has grown to be one of the UK’s largest new media directories businesses providing listing and web-sites for small and medium sized enterprise customers in the UK. Ufindus’ operating profit for the year ended 31 March 2007 was £1,457k (2006 operating loss of £37k) on revenues of £14,095k (2006 £10,946k), with net assets at 31 March 2007 of £2,658k (2006 £1,199k). This disposal is expected to generate a profit of £15 million before goodwill adjustments.
The proceeds of the sale will be used largely to assist with the funding of iomart’s expansion of its hosting and managed service operations. The Directors are confident that the experience and expertise available within the Group will enable it to build a successful hosting and managed service business.
Of the total cash consideration, the Company is giving certain warranties and indemnities in connection with the disposal and £2 million of the consideration is being placed into escrow, £1 million to be released after 6 months and the remainder to be released after 24 months.
iomart expects to announce its preliminary results for the year ended 31 March 2008 on 29th July.
Angus MacSween, CEO of iomart said:
"This disposal of Ufindus, in this more uncertain economic environment, reflects the quality of the business that has been built up and crystallises its value for shareholders. We wish the business well under its new ownership.
The disposal will allow iomart to focus on its core offering of its managed webhosting business, Easyspace and its datacentre operations, both of which are expected to perform well in the current market environment”.Subscribe to RSS Feed