Mon, 05 Jun 2023 | BUSINESS SALE
The holding company behind an Oxford-based cloud services firm has been acquired by a listed group in a deal worth an initial £4 million. The deal will see iomart Group acquire Extrinsica Global Holdings, the company behind Extrinsica Global, which was founded in 2010 and in 2017 became one of Microsoft’s first 25 worldwide Microsoft Azure CSP partners.
The £4 million initial consideration comprises £2 million in cash and £2 million to be satisfied through the issuing of 1,562,500 new ordinary shares in iomart. Under the sale and purchase agreement terms, the issued shares are subject to a 12-month lock-in provision and are based on a fixed £1.28 share price.
In addition to the £4 million consideration, there is a further £300,000 payable in cash contingent upon the achievement of certain customer targets within the calendar year. The deal will also see iomart repay £3.7 million of debt acquired upon completion.
On top of this, there is also a further £4 million to £7 million in contingent earnout payments, calculated upon Extrinsica’s profitability in the 12 months ending March 31 2024. In the year to March 31 2023, Extrinsica generated revenue of £7.4 million.
Extrinsica CEO and co-founder Simon Smith said that the acquisition would provide the firm “with a strengthened platform for growth” and would enable the company to “leverage joint capabilities, capitalise on our understanding of the markets we operate in and build upon our significant achievements to date.”
iomart Group plc CEO Reece Donovan said that Extrinsica had been “at the forefront of the market developments of Azure since 2017” and that the company’s cloud computing pedigree would “accelerate the initial investments we have made in our own Microsoft resources and capabilities.”
Donovan added: "This is a meaningful step in our strategy as we position the group for its next phase of growth as a leading secure hybrid cloud business."
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