Telecoms services provider Pinnacle Telecom is buying Solwise Telephony for up to £500,000 in shares.
The initial consideration is worth £181,000 at 0.57p a share and a further £24,000 will be paid in connection with loans from vendors. The deferred consideration is based on earnings before interest in the year to September 2010 and in the year to September 2011. In the first year £15,000 will be payable for every £10,000 profit above £40,000 and in the second year it is £15,000 for every £10,000 above £60,000. The issue price of the shares will be based on the mid-price at the end of September in each of the years. The maximum payable is £295,000.
Leicestershire-based Solwise brings with it 600 active business customers and a data centre in Brighton. A subsidiary has developed its own voice over IP platform. Pinnacle VoIP customers will move to this platform. Solwise made an operating profit of £18,000 on revenues of £1.03m in the 17 months to September 2009.
At 0.51p a share, down 0.005p on the day, Pinnacle is valued at £8.6m.
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