Released: 03/11/2009
com:20091103:RnsC8147B
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RNS Number : 8147B
Spiritel PLC
03 November 2009
3 November 2009
SPIRITEL PLC
("SpiriTel", "the Company" or "the Group")
£10 MILLION FUNDRAISING
Led by Penta Capital with participation by Synergy Capital and Toscafund
ACQUISITION OF EDGE SOLUTIONS LTD
A specialist provider of voice and data services
SpiriTel plc, (AIM:STP), the business communications service provider, is
pleased to announce the issue of up to £10 million loan notes and the
acquisition of Edge Solutions Ltd ("Edge"), for an initial consideration of £3.6
million. The new funds will be used to allow the Company to continue its
successful acquisition strategy as a consolidator of the highly fragmented
telecoms reseller sector.
The fundraise, led by SpiriTel's largest shareholder Penta Capital, includes
participation by Synergy Capital and Toscafund. The loan note issue is expected
to raise a total of £10 million, of which £9.2 million has already been
subscribed. The loan notes are convertible at 40p per ordinary share with a 10
per cent yield and are repayable at the Company's option, no later than November
2014, with a 20 per cent redemption premium.
Edge is based in London and is a leading provider of voice and data services to
almost 200 corporate customers, which include Guoman Thistle, Boden and several
blue chip financial institutions. The acquisition increases SpiriTel's customer
base to approximately 2,500 businesses. Edge's client base delivers a market
leading average customer spend of over £2,000 per month, with an annual churn
rate of less than 2 per cent. It is anticipated that the high quality customer
base will present significant cross selling opportunities for SpiriTel.
Edge is SpiriTel's seventh acquisition in three years. The transaction is
expected to be immediately earnings enhancing and as with SpiriTel's previous
acquisitions, will be swiftly integrated into SpiriTel's Business Division,
providing operational cost synergies. The majority of SpiriTel's revenues are
now recurring in nature under long term contracts, providing a increased level
of earnings visibility to the Group.
Under the terms of the acquisition, SpiriTel has agreed to pay £3.6 million in
cash on completion. Performance related earn-out payments of up to £5.7 million
may also payable in cash by January 2011. Based on the current performance of
Edge, the Directors estimate that the additional consideration payable would be
approximately £1.2 million. In the financial year ending April 2009, Edge
reported revenues of £5.5 million, EBITDA of £0.7 million and profit before tax
of £0.6 million. Edge is currently trading at a level of profitability
significantly ahead of this and as at 30 April 2009, had net assets of £0.4
million.
Ronnie Smith, Chief Financial Officer of SpiriTel, said of the fundraising, "We
are delighted to have raised substantial funds from some high quality,
experienced investors who understand our sector and the SpiriTel consolidation
model. Their commitment is an endorsement of both our strategy and the strength
of our management team. We welcome our new investors and look forward to further
expanding the Group for the benefit of our stakeholders."
Commenting on the acquisition, Alastair Mills, Chief Executive of SpiriTel said:
"The acquisition of Edge represents a significant step in our 'Acquire,
Integrate and Grow' strategy. We have a track record in successful acquisition
and integration and the delivery of organic growth from cross selling our
converged product portfolio. We are delighted to be adding Edge to the Group and
as our largest acquisition to date with a first class customer list, the deal
will have a significant impact on future earnings."
He added: "I am also delighted that Steve Burgess is joining the SpiriTel team
to head up our Networks line of business, the largest within the Group".
Steve Burgess, Managing Director of Edge Solutions said: "This is a very
exciting development for Edge staff and customers. SpiriTel is recognised as a
leading provider of integrated communications services for business customers
and we are looking forward to building on Edge's recent success alongside such a
well established and respected B2B service provider. We are confident of
contributing to the ongoing success of SpiriTel".
For further information please visit www.spiritelplc.com or contact:
SpiriTel plc Tavistock Communications FinnCap
Alastair Mills Simon Hudson Geoff Nash
Chief Executive Duncan McCormick Marc Young
Tel: 020 7160 0100 Tel: 020 7920 3150 Tel: 020 7600 1658
Notes to Editors
SpiriTel is a business communications group which is taking advantage of the
opportunities created by rapidly changing telecoms markets in the UK as the
migration to Internet Protocol (IP) based services accelerates. The Group is a
consolidator of the highly fragmented UK telecoms reseller market and is
building a substantial customer base and scale through selective
earnings-enhancing acquisitions. We are organised into two divisions, SpiriTel
Technologies - focused on our infrastructure and IP products and services - and
SpiriTel Business, which provides our fully integrated range of voice and data
services direct to business customers.
Today, the Group offers a broad range of voice and data communications products
and services to a customer base of small and medium sized enterprises and an
increasing number of larger national and international organisations. We are a
recognised leader in the provision of new, but proven, Voice over IP (VoIP)
solutions that are firmly based on the old-fashioned service values, which run
throughout the Group.
This information is provided by RNS
The company news service from the London Stock Exchange
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