iomart Group plc Secures £10m from Lloyds Banking Group
AIM-listed iomart Group plc has secured a £10 million credit facility from Lloyds Banking Group as it continues its strategy to grow its managed hosting business through a combination of organic growth and acquisition.
The company, which purchased Maidenhead based server hosting company RapidSwitch in May 2009, looks set to acquire further complementary hosting businesses to bring into the Group.
Angus MacSween, CEO of iomart Group plc, said: “Last year we disposed of a non-core business and used some of the cash to make the strategic acquisition of RapidSwitch. We stated at the time of the purchase that we expected the acquisition to be immediately earnings enhancing and this has proven to be the case.
“The market reaction to our goal of becoming the UK’s leading managed hosting and cloud computing services company has been very encouraging to date, and we are convinced that further acquisitions will accelerate both our growth and our profits.
“When the lack of availability of debt finance is a constant topic of debate in the corporate world, our agreement with Lloyds demonstrates the faith it has in both our business model and our ability to deliver.
“We are already in the enviable position of having a sufficiently strong balance sheet to fund our business plans, but this additional facility will ensure that we can strike quickly should the right opportunity present itself.”
The deal represents the latest development in a long-standing relationship with the bank.
MacSween added: “We have had a good relationship with the bank for many years and it has been extremely supportive of our business goals.
“Lloyds has witnessed our maturing as an organisation, overseen our period of investment in our data centres and network, and more importantly has seen us build a solid credible reputation for good service within our chosen markets. We are making strong inroads into the relatively new cloud computing space and we intend to capitalise fully on our innovation and proven capabilities in this fast growing and exciting market. Lloyds has been impressed by what we have achieved to date and now they want us to push on and become the UK market leaders.”
Graham Silcock, relationship director in Glasgow and the West for Lloyds Banking Group’s corporate markets division, added: “The provision of an acquisition facility on this scale demonstrates both iomart’s appetite for growth and our commitment to supporting strong Scottish businesses with appropriate finance.
“The war chest gives iomart the confidence to negotiate with target businesses knowing they have our full support. Only businesses with good balance sheets and strong management teams warrant pre-approved acquisition facilities and we feel iomart falls into that category.
“Lloyds Banking Group has already approved over £100 million worth of finance for businesses in Scotland looking for acquisition targets. The market is certainly more buoyant now and we expect further transaction-led activity in the months to come.”
The Group will announce its full-year financial results tomorrow, having already indicated in March that it expects its results to be ahead of expectations. The Group is forecasting an EBITDA profit, before share based payments, in the region of £3m.
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