LONDON, UK: iomart Group plc (AIM: IOM), the cloud computing company, has announced that it has agreed to acquire the entire issued share capital of Extrinsica Global Holdings.

Extrinsica Global Holdings is a Microsoft Azure Cloud solution services provider with offerings including managed Azure Cloud, Azure solution design and implementation services, support & optimization services and licensing.

The acquisition is aligned with iomart’s secure hybrid cloud strategy and will provide the company with deep Microsoft Azure expertise, a highly capable team of 33 based in the UK, strong customer references and a shared value and vision for how the Microsoft Practice in iomart should be shaped to support acceleration of growth.

Simon Smith, CEO and Co-Founder of Extrinsica, will continue to lead the business as CEO supported by his highly skilled and experienced team. From a legal, financial and governance perspective, they will be very much part of the iomart Group.

For the year ended 31 March 2023, Extrinsica generated revenues of £7.4m, being year on year growth of c.40%, and EBITDA of £0.1m (unaudited). The acquisition is not considered a substantial transaction as defined in AIM Rule 12.

The initial consideration for the Acquisition is £4.0m, with a potential further £0.3m in cash payable on the achievement of certain key customer targets during the calendar year.

The Acquisition also includes a further £4.0m to £7.0m of contingent earn-out payments which are calculated based on Extrinsica’s profitability for the 12 months ending 31 March 2024.

The initial consideration, debt settlement and any earn out consideration will be financed through a combination of existing bank facilities and cash on the Company’s balance sheet.

The vendors of Extrinsica include the existing management team, amongst others. The largest shareholder is The Vale Retirement Trust with c. 25% of all the issued share capital. This trust is an investment vehicle for a high wealth individual who is not involved in the management of the business.

Reece Donovan, CEO of iomart Group plc, commented: “We are delighted to welcome the Extrinsica team to iomart, providing a large step forward in iomart’s capabilities to support existing and new customers in their use of Microsoft’s Azure cloud platform. Simon and the team have been at the forefront of the market developments of Azure since 2017 and have deep skills and expertise in this in-demand area of cloud computing, which will accelerate the initial investments we have made in our own Microsoft resources and capabilities.

Simon Smith, CEO of Extrinsica, commented: “Joining iomart marks an exciting phase for our highly skilled, experienced and ambitious team, providing us with a strengthened platform for growth. It allows us to leverage joint capabilities, capitalise on our understanding of the markets we operate in and build upon our significant achievements to date.

iomart has a long pedigree in cloud infrastructure, an impressive customer base and a growth strategy which I believe positions iomart well for future success. The team and I are all incredibly excited to be working as part of the wider group and look forward to being a key part of driving iomart’s ongoing success.”

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