This investment is in keeping with the Group’s intention to be the international supplier of choice for organisations investing in emerging technologies and for whom business continuity and high availability issues are of key importance.
Guardian has agreed to acquire the share capital of Allegro. The initial purchase price payable in full upon completion for 100% of the shares of Allegro will be GBP3.8 million, to be satisfied by the payment of GBP1.9 million in cash and the issue of 195,680 Guardian iT plc ordinary shares. It is expected that completion will become effective on Wednesday 28 February 2001. A maximum further GBP1.1 million of deferred consideration is payable within the next three months and a maximum further GBP1.6 million of deferred consideration is payable upon the achievement by Allegro of targeted profit before tax for the year ending 31 December 2001.
Guardian has also taken an option to acquire Allegro Magyaroszag Kft, based in Hungary (which is owned by the shareholders of Allegro, but which does not form part of the Allegro Group). The option may be exercised at any time until 1 June 2001 at an aggregate purchase price of GBP75,000.
With operating subsidiaries in Oslo, Stockholm, Copenhagen and Helsinki, Allegro specialises in data backup and storage area network (SAN) solutions. Established in 1995, Allegro has 29 employees and has developed a high level of expertise in the design and implementation of storage management solutions. Allegro enables its customers to store, protect and make available large volumes of computer data. Support services including integration, training and consulting are also available throughout the Nordic region.
Allegro’s audited turnover for the year ended 31 December 2000 was GBP5.5 million, with profit before tax of GBP0.6 million and the business is cashflow positive.
The acquisition will strengthen Guardian’s position in the strategically important data storage market, where the explosive demand in SAN technology has led to the need for creative and pertinent solutions for data management and storage. The Allegro acquisition will complement the acquisition in October 2000 of Kingswell Computer Company Limited, the SAN and data storage company, and the SANguardian business, which was recently established to align storage solutions with those of business continuity to ensure effective recovery strategies for customers of Guardian iT Group.
Guardian expects that the acquisition will be earnings enhancing in 2001 before goodwill amortisation. The benefits expected to be obtained from integration, and the existing growth prospects of the Allegro business should result in the acquisition delivering a positive contribution to Guardian’s profits and shareholder value in the future.
Application has been made for the 195,680 new ordinary shares to be admitted to the Official List of the UK Listing Authority and to trading on the listed market of the London Stock Exchange. The new ordinary shares will rank pari passu with the existing Guardian ordinary shares.
Commenting today, Peter MacLean, Chief Executive of Guardian iT plc, said,
Allegro has demonstrated significant independent expertise in the data management and storage solutions market, earning a reputation for technical expertise, credibility and high quality service. The acquisition will strengthen Guardian’s position in the strategically important SAN solutions market and will complement the capabilities of the recently established SANguardian business and the recent acquisition of Kingswell.
