ATUK provides telecommunications services, including fixed line and mobile, to business customers both directly and indirectly through a dealer network. Accent owns 30% of the equity of two independent resellers who trade under the Accent brand: Accent Telecom North Limited (“ATN”) based in Stockton on Tees, and Accent Telecom South Limited (“ATS”) based in Middlesex, which exclusively sell Accent’s services into the SME market.
ATUK also owns 40% of the issued share capital of Stripe 21 Limited, a fast growing network solutions business based in Dorking, Surrey which provides state-of-the-art IP based business services to SMEs and corporates. In addition, ATUK owns 33% of CityX Limited, which seeks to provide high quality voice over broadband services to multi-sited businesses.
Based on its unaudited management accounts, in the year ended 31st March 2009, ATUK had a turnover of £3,522,430 (2008: £2,454,956), ATUK had net assets of £330,570 (2008: £270,648) and no debt other than the sum of £42,189 (2008: £54,109) relating to equipment leasing. ATUK has no contractual obligation to fund any of the associated companies.
Darron Giddens, the founder director and the other major shareholder, Paul Goodland, have been instrumental in building the Accent business and both will remain with ATUK.
The services provided by ATUK are highly complementary to the telecommunications focus of Pinnacle. When coupled with the benefit of Pinnacle’s supply arrangements following integration of the companies, the Directors believe that there will be material benefits to the profitability of the ATUK business which, like Pinnacle, is mainly based on recurring income streams. The acquisition brings with it an established base in the Northampton area allowing the Company to further expand its operations outside Scotland.
There are also a number of additional key benefits:
Accent is experienced in selling a broad range of converged voice and data solutions, including hosted telephony (VoIP).
The acquisition delivers customers into which Pinnacle can cross-sell its products.
Accent has a track record of selling mobile solutions to businesses and has a direct trading agreement with O2, which compliments Pinnacle’s direct trading agreement with Vodofone.
The acquisition brings additional revenue (£3.5m in the 12 months to 31st March 2009).
Similar cultures exist between Accent and Pinnacle, which will help rapid integration.
The Accent founder and CEO has served previously on an AIM company board.
The Directors believe that this is a pivotal transaction for the Company. It will materially increase group turnover, and give the enlarged business greater scale and wider geographic coverage. Creating a business of substance remains a key objective of the Board.
Commenting Alan J Bonner, Chief Executive of the Company, said: “I am delighted that we have completed this acquisition. Accent Telecom has an excellent team of people and its business is highly complementary to Pinnacle, giving us a solid base of customers across the UK and, through Stripe 21 Limited, interests in a range of next generation IP solutions, which will help us better utilise our capability as a public telecommunications operator. The acquisition also brings us additional depth of experience in the telecommunications business led by Darron Giddens, the Accent CEO who is a qualified accountant and, until mid 2002, was the Finance Director of IDN Telecom plc, a previous AIM listed company that was sold to Redstone plc in early 2007.
We are looking forward to working with Paul Goodland and Darron Giddens and our intention is quickly to integrate the two businesses. Cross-selling multiple services to our customers is a key feature of our strategy which will be enhanced by this acquisition. We intend to build on our strategy of expanding the Company through bolt-on opportunities, thereby enhancing our services to customers as well as strengthening our organic growth capabilities.”