Acquisition of Certus IT Limited (“Certus”),

Placing of 26,315,792 new ordinary shares to raise approximately £10.0 million, 

new £5.0 million banking facilities,

related party transaction

and 

Notice of General Meeting

SysGroup, the award winning managed IT services and cloud hosting provider, is pleased to announce that it has conditionally agreed to acquire Certus IT Limited, a growing, profitable and cash-generative managed IT services and cloud hosting provider based in Newport, South Wales, for an initial cash consideration of £8.0 million on a debt free cash free and normalised working capital basis, increasing to a maximum cash consideration of £9.0 million dependent on the performance of Certus in the 12 month period following completion (the “Acquisition”). The Company also announces that it has conditionally raised £10.0 million, before expenses through the placing of 26,315,792 new ordinary shares of 1 pence each (“Ordinary Shares”) in the capital of the Company (the “Placing Shares”) at a price of 38 pence each to fund the acquisition (the “Placing”).

The Acquisition is in line with the Group’s stated strategy of augmenting its organic growth with select acquisitions. Certus is an established and growing managed services provider which has a complementary service offering, geographical reach and customer base to SysGroup. Certus will help to bolster the Group’s existing managed service offerings, by expanding the Enlarged Group’s current IaaS customers base, significantly adding to its managed connectivity portfolio and further strengthening the existing relationship with Dell EMC by upgrading the Group to gold partner status. In addition, the Group’s consultative led sales approach and security focus will assist with generating cross-selling opportunities into the Certus customer base.

Commenting on the Transaction, Adam Binks, CEO of SysGroup, said:

“I am delighted to have completed the Placing and we are very pleased with the significant support we have received from both new and existing shareholders. The funds raised coupled with the new bank facilities will ensure the Group is well positioned to continue to invest in opportunities for growth. Further, I am excited to be welcoming both the Certus team and its customers to the SysGroup family. The addition of Certus to the Group represents a step-change in terms of the scale of the business, and we believe the enlarged Group will be better positioned to penetrate our target market and drive further growth. This acquisition fits within our strategy of growing the business organically and through strategic acquisitions, and we are excited by the prospects that lie ahead.”

STATISTICS RELATING TO THE ACQUISITION AND PLACING

For further information contact:

Edward Mansfield

Anita Ghanekar

Daniel Bush