Daily Internet to buy Sys-Pro for £3.9m

Daily Internet, a web and cloud hosting firm, is to buy System Professional (Sys-Pro), a managed services and technology, provider for £3.9m.

The company has proposed the acquisition of Sys-Pro to be paid with £3.3m in cash and through the issue of 975,000 consideration shares. The sale price could rise by £1.87m if Sys-Pro hits its performance targets.

The acquisition should double the company’s annual turnover. The newly combined revenue for the 2016 financial year could be £10.02m compared to what Daily Internet’s revenue would have been at £4.76m.

The combined company's adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the 2016 financial year could be £1.45m as opposed to Daily Internet’s £0.67m.

Daily Internet said it conditionally raised £5m by placing new ordinary shares at 60p – 1.5p per existing ordinary share – supported by new and old existing shareholders.

The company also said it will change its name to SysGroup following the acquisition as the larger group will have increased technical capabilities and a more diversified customer base.

Daily Internet chief executive Chris Evans said: “As well as being immediately earnings enhancing it [the acquisition] will greatly strengthen our core Managed Services business in terms of scale and capability.

“This will enable us to better exploit the ongoing market shift toward cloud delivered services and accelerate our growth. In addition, synergies and our increased scale are expected to reduce combined incremental costs going forward.”