SysGroup offloads internet subsidiary for £2.7m

MANAGED services and cloud integrator SysGroup is to sell its SME mass market business operated by Daily Internet Services to a subsidiary of Host Europe Group for £2.7m.

The deal will see AIM-listed SysGroup’s financial function transferred to Liverpool. Julie Joyce, who has been the group’s chief financial officer since 2007 and is based in Nottingham is resigning from the board and as CFO with effect from August 15.

She is being replaced by Michael Hogan, although Joyce will remain with the company until January 31 2017 to ensure a smooth transition.

For the year ending March 31, Daily generated revenues of £2.25m and adjusted EBITDA of £0.55m.

The group’s current cash position following receipt of the proceeds from the transaction is £4.1m.

The cash position takes into account the net proceeds of the recent placing but prior an additional payment of excess working capital due to the vendors of Sys-Pro, which is expected to be approximately £0.3m.

SysGroup chief executive Chris Evans said: “We are delighted to announce the appointment of Michael Hogan to our board.

“As CFO, Michael will greatly strengthen our management capabilities and his extensive transactional experience will be invaluable to SysGroup as we continue to build our managed services business.

“The disposal of Daily is a significant development for the group, enabling us to focus our efforts on our core managed services business, which recently underwent a transformational expansion with the acquisition of Sys-Pro. The managed services industry is undergoing rapid growth as organisations increasingly seek cloud delivery of services.”

Kuits advised SysGroup – corporate partner Kirsti Pinnell led the transaction, assisted by solicitor Anne-Marie Coles.

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