News Column

Castleton Shares Up 24% As It Acquires Montal For GBP3.8 Million

June 23, 2014

Hana Stewart-Smith

LONDON (Alliance News) - Shares in Castleton Technology PLC were trading up almost a quarter Monday after it said that it had acquired specialist outsourced IT managed services business Montal Holdings Ltd for GBP3.8 million.

Shares in Castleton were trading up 0.23 pence, or 24%, at 1.18p Monday morning. They touched an intraday high of 1.29p following the pre-market announcement.

Castleton will pay GBP3.04 million in cash and GBP0.79 million in loan notes. The loan notes are repayable in 12 months and carry a coupon of 8% per year, it said. MXC Capital Ltd, which owns 18% of Montal, will receive its share of the consideration in loan notes.

Montal posted earnings before interest, tax, depreciation and amortisation of GBP481,000, on revenue of GBP3.2 million in the half year to end-March. It saw a pretax profit of GBP395,000 on revenue of GBP5.7 million in the year ended September 30, 2013.

Castleton said it will continued to seek further acquisitions in the technology sector, and said that "clear opportunities exist to build a scale managed-services business" given the nature of the sector and MXC's access to suitable targets.

The company is due to receive GBP1.1 million in November as a deferred consideration from its sale of Comunica Holdings Ltd in November 2013, and a further GBP300,000 is expected from other recent disposals.

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Source: Alliance News

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