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Maxima
Oakley advises on the sale of Redstone Plc telecoms division to Daisy Group PLC
Completed Transactions - Maxima Logo
Sector:
Technology
Transaction Type:
Disposal, ECM
Date:
November 2012
Deal Value:
£13.8m

Oakley Capital Corporate Finance (“Oakley”) has advised Maxima Holdings plc (“Maxima”) on its acquisition by Redstone plc (“Redstone”). The acquisition, by way of a scheme of arrangement (“Scheme”), became effective on 9 November 2012 and Redstone shares were issued to Maxima shareholders and were admitted to trading on AIM. The transaction is another demonstration of Oakley’s capability in the managed IT services sector.

The acquisition fits in with Redstone’s strategy to be a leading provider of network-based, end to end, managed services and technology and infrastructure solutions. The combination with Maxima will create an independent UK managed services provider with enhanced revenues, customer scale and technical ability. The combination of the two businesses should also provide significant potential for cross sell and upsell of products into the companies’ respective client bases.

Oakley was hired by Maxima to assess a potential sale of its managed services division by the plc. This process led to a takeover offer for the whole Maxima group from Redstone and Oakley acted as Rule 3 advisor to the Independent Maxima Directors on this offer. Under the terms of the Scheme, Maxima Shareholders received 28 New Redstone Shares for each Maxima share. Redstone also raised approximately £3,000,000 before expenses by means of a placing of new Redstone Shares at 1 penny per Redstone Share (“the Placing Price”). The placing price implies an Enterprise Value for Maxima of £13.8m. The Placing will be used to fund the implementation of the synergies between the businesses of Redstone and Maxima identified by the Redstone Board, as well as to meet the costs associated with the Acquisition and to provide the Enlarged Group with general working capital. Based on the Placing Price, the acquisition represented a premium of approximately 38.3% to the Closing Price of 20.25 pence per Maxima Share on 14 September 2012, the day before the Offer announcement.

Material cost synergies are expected within the enlarged business, estimated to be in the region of £2.3 million. In addition, Maxima’s Indian back office operations are expected to deliver significant service and cost benefits to the enlarged group.

Oakley has, over the past 5 years, completed frequent transactions in the managed IT services market. In addition, the deal further deepens Oakley’s experience of acting for public companies. The Oakley team was led by Chris Godsmark, joint Managing Partner, Chris Brooks, Director and Maria Candelario, Associate.

Chris Godsmark said,

“We were very pleased to have assisted the Independent Directors of Maxima in evaluating the offer from Redstone. Oakley has previously carried out a review of the Maxima managed services division and considered various offers for the division from the plc. We then advised Maxima’s Independent Directors on the merits of the public takeover offer by Redstone. The enlarged Redstone group is now a leading managed services provider in the UK and we wish the enlarged business and management team well.”

For further information please contact:
Chris Godsmark, Partner
Chris Brooks, Managing Partner
+44 207 766 6900

*Completed by Oakley Capital Corporate Finance

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