iomart Group plc
("iomart" or the "Group")
Acquisition of Switch Media
iomart Group plc (AIM:IOM), the managed hosting and cloud computing services company, is pleased to announce the acquisition of the entire issued share capital of Switch Media Limited ("Switch Media") for a total cash consideration of £1.25 million.
Based in Liverpool, Switch Media supplies domain name and shared hosting services to small businesses, operating in a similar market to iomart's Easyspace division.
Switch Media has over 10,000 customers providing a strong base of additional business from which the Group can expand its small company hosting business.
For the year to 31 December 2010, Switch Media had EBITDA adjusted for non-recurring items of £79,000 and turnover of £1.3m.
iomart believes it can achieve a significant level of cost savings on the integration of Switch Media into the Group through the reduction of overheads. As a result, the acquisition should result in a significant improvement in Switch Media's EBITDA margin and is expected to be immediately earnings enhancing to the Group as a whole.
Of the total consideration of £1.25m, £1.025m has been paid on completion and a further £225k is payable no earlier than October 2011 subject to certain performance criteria being met. In addition, it is expected that Switch Media will have net cash on completion of approximately £100k resulting therefore in an initial net cash outlay of £925,000.
Angus MacSween, CEO of iomart Group plc, stated:
"The acquisition of Switch Media is a further step in the achievement of iomart's strategy of building a leading hosting company in the UK. Switch Media is an excellent complementary business to Easyspace in the small company segment of the hosting services market and will enhance the growth of iomart through expansion of the Group's customer base and access to new clients."
For further information:
iomart Group plc Tel. 0141 931 6400
Angus MacSween, Chief Executive Officer
Richard Logan, Finance Director
Peel Hunt LLP (Nominated Adviser and Broker) Tel. 020 7418 8900
Threadneedle Communications Tel. 020 7653 9850
About iomart Group plc
iomart Group is one of the UK's leading providers of managed hosting and cloud computing services. From a single server through to private cloud networks, iomart specialises in the delivery and management of mission-critical hosting services, enabling customers to reduce the costs, complexity and risks associated with maintaining their own web and online applications.
By physically owning and managing its own network infrastructure, including five state-of-the-art data centres in the UK, iomart offers world-beating levels of service to its customers. The Group offers a unique 100% uptime guarantee with all hosting services being engineered to ensure no single point of failure.
iomart Group operates in its chosen markets through a number of subsidiaries: iomart Hosting, RapidSwitch, Titan Internet, Easyspace and West Coast Cloud. The group has been listed on the London Stock Exchange's Alternative Investment Market (AIM) since April 2000.