Montal largely provides managed IT services to SME-sized social housing providers and non-profit organisations across the UK. It has an estimated 3,500 customer site and the acquisition is designed to expand Montal’s growth in public sector managed services.
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Ian Smith, chief executive, Castleton Technology said: “The acquisition of Montal... is the beginning of a new phase of exciting growth for the company. Today we are starting a journey with Montal to build a public sector-focused managed services business."
Montal turned over £5.7m in the year to 30th Sept. 2013 with pre-tax profits of £395k. MXC Capital, a corporate finance firm owned 18% of Montal’s share capital via an investment made last year.
MXC Capital was founded by Ian Smith, and business partner Tony Weaver.It will receive its share of the consideration, £0.59m, in loan notes to help to facilitate the transaction and leave Castleton with sufficient working capital following the acquisition.
Castleton Technologies was created last year from the shell of a company Redstone which de-merged from Redcentric. Smith’s business partner Weaver is CEO of Redcentric and also holds a position at Castleton Technology.
Castleton Technology is an AIM listed company and an AIM market watcher said of the Montal acquisition: “Smith and Weaver have a long and successful history in the IT services buy and build space and have a reputation for ‘walking the walk’ as well as ‘talking the talk’, so we will be paying attention.”