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.
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.”