Cloud-based IT firm swallowed by Pinnacle Technology

WARRINGTON-based cloud IT company adept4 has been acquired by Pinnacle Technology Group, the AIM-listed of provider of converged technology solutions for £7m.

The deal is for an initial  consideration of £4.5m satisfied in cash plus a deferred consideration of £1m in cash, payable in January 2018. A further contingent consideration of up to £1.5m in cash is payable in March 2018, subject to performance criteria for the year to December 31 2017.

The acquisition is part financed through 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% uplift from the February placing price of 4.2p.

Pinnacle also announced the company’s intention to change its name to adept4 plc.
 
adept4 provides IT as a service encompassing fully managed IT service contracts, cloud-based services, professional services, software support and development.

It has about  60 customers with average contract lengths of three to six years.

Pinnacle hailed its strong management team with experience of both organic and acquisition growth.

In the year to December 31 2014, adept4 generated revenue of £5m and EBITDA of £0.75m.

Pinnacle executive chairman Gavin 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.”

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