LONDON (ShareCast) - (Sharecast News) - Managed IT services and cloud hosting provider SysGroup has agreed to buy Newport-based Certus IT Limited for up to £9m in cash.
The AIM-listed company also said on Wednesday that it has conditionally raised £10m through a placing of 26.3 million new ordinary shares to fund the acquisition.

SysGroup said Certus is an established and growing managed services provider which has a complementary service offering, geographical reach and customer base. It 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.

Certus will provide the enlarged group with critical mass in the managed IT services market and strengthen the group's core service offering. It will also broaden the company's penetration into new vertical markets, including into the professional services and manufacturing sectors.

SysGroup also said that it has conditionally re-financed its existing term loan facility as a £1.75m term loan over five years and arranged a new £3.25m acquisition revolving credit facility with Santander to provide additional financial flexibility.

Chief executive officer Adam Binks 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."

The initial consideration for the deal is £8m in cash, increasing to a maximum of £9m dependent on the performance of Certus in the 12 months following completion of the acquisition.

At 1310 GMT, the shares were down 4% to 40.33p.

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