REDS has agreed to acquire Easter Road Holdings and its subsidiary Anders + Kern for £1.4m
Companies: Smartspace Software Plc
RedstoneConnect says it has agreed to acquire Easter Road Holdings and its subsidiary Anders + Kern in a £1.4m cash deal. The AIM-listed tech firm also announced that it is planning to raise up to £6.5m through a share placing to help finance the transaction.
REDS is proposing a placing of 433m new shares at 1.5p (Monday's closing price), with the proceeds being used to finance the acquisition and to accelerate investment in the development of OneSpace, its occupancy management tool.
The audio and visual equipment supplier A+K had a turnover of £3m last year and generated £1.14m in gross profit. The A+K sales and marketing team will be consolidated with the existing RedstoneConnect team and led by the current A+K Managing Director, Steven Black.
CEO Mark Braund said the acquisition was an important strategic development for REDS, broadening its smart building proposition and expanding its direct and indirect sales channels:
"We are delighted to welcome A+K's experienced sales, marketing and technology teams into our business which will add momentum to our 'go to' market strategy."
RedstoneConnect are acquiring the firm to broaden its blue-chip customer base (British Library, MacMillan, Saville, Tullow Oil and BBC Worldwide), while also gaining the opportunity to cross-sell the Group's products from a centralised sales team with experience of A+K and RedstoneConnect.
REDS shares fell marginally early this morning, having risen 34% since the start of 2017. Writing in this month's AIM Journal, Northland Capital analyst Marriott Harrison said the firm was trading at 15 times prospective earnings, falling to 12 the following year: "There is potential for add-on acquisitions to broaden the group’s technology and customer base."
