Milgo Solutions is a leading-edge provider of communications solutions and brings to Kingston best-in-class sales and technical skills in the rapidly expanding data communications and managed network services arena. The acquisition significantly broadens and deepens the Kingston group’s existing business-to-business solutions portfolio in the converging voice and data markets.
Milgo Solutions’ strong national and regional presence will also complement the structure of Kingston’s established regionally focused networking and business solutions activities.
With over 200 employees and a strong senior management team, Milgo Solutions provides communications solutions in the following areas:
Managed solutions – Milgo Solutions offers remote network management and fully managed network services using a state-of-the-art network management centre based in Hook, Hampshire. Services include the end-to-end management of Local and Wide Area Networks (LANs and WANs);
eNetworking solutions – Milgo Solutions performs leading-edge network design primarily using industry leading products from Cisco Systems and Nortel Networks. Milgo Solutions has numerous industry accreditations and is a Cisco Systems Gold Partner and a Nortel Networks Enterprise Solutions Partner; and
Support Solutions – Milgo Solutions offers hardware maintenance, pro-active software support and disaster recovery services utilising a nationwide network of over 60 field technicians
Kingston’s business-to-business solutions division already offers a broad portfolio of voice, data, Internet and mobile services from seven centres across the UK. Current industry accreditations for data networking include Cisco Systems, Citrix Systems, Compaq Computers and 3Com. These activities are supported by Kingston’s seven metropolitan networks and a national broadband infrastructure which is nearing completion.
Kingston Chief Executive Steve Maine said: This is a very important strategic acquisition for Kingston. Milgo Solutions both complements and enhances our existing voice and data networking offering and accelerates Kingston’s proposition in the provision of end-to-end solutions for businesses.
We are bringing on board strong management and a highly-skilled sales and national technical team to the Kingston group which maps on to our existing regionally-focused business-to-business activities. We see considerable cross-selling opportunities for Milgo Solutions within Kingston’s existing corporate client base, which we believe will provide significantly enhanced benefits for current and future customers.
In the year ended 31st December 2000, Milgo Solutions reported unaudited turnover of GBP 29.2 million and profit before taxation of GBP 1.5 million. As at 31st December 2000, Milgo Solutions had unaudited net assets of GBP 4.6 million.
On completion, Kingston will pay to Platinum, as consideration for the acquisition, GBP 10 million in cash and GBP 13.4 million through the issue of 9,081,668 new Kingston shares (the vendor shares), representing approximately 2.4 per cent of Kingston’s enlarged issued share capital. Platinum has agreed it will not sell the vendor shares until 28th February 2002 and, for nine months thereafter, the vendor shares will be subject to an orderly marketing arrangement with Kingston’s brokers.
The agreement also provides Platinum with some limited downside protection on the Kingston share price during the lock-up period to 28th February 2002, through the possible issue to Platinum on that date of up to a maximum of 3,027,222 additional new Kingston shares.
Kingston is raising the cash element of the consideration through the issue of 7,246,377 new Kingston shares (representing approximately 1.9 per cent of Kingston’s enlarged issued share capital) to JPMorgan at a price of 138 pence per share.
Application will be made for the admission of 16,328,045 shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange’s market for listed securities. These shares will rank pari passu with the existing Kingston shares. It is expected that admission of the new Kingston shares to the Official List will become effective, and dealings in the new Kingston shares on the London Stock Exchange will commence, on Wednesday 14th March 2001.
