LONDON (Alliance News) - Pinnacle Technology Group PLC Monday said it has agreed to buy the remaining 70% stake in Accent Telecom North Ltd it does not already own, and has agreed to sell its 40% stake in Stripe 21 Ltd.
Accent Telecom North has operated solely as a reseller of Accent Telecom UK, a trading subsidiary of Pinnacle, and Pinnacle will buy up the remainder of the business for GBP586,000. Of this Pinnacle paid GBP326,000 on completion, and the balance will be payable in March 2017.
Accent Telecom North had operated under an agreement where it received 80% of the net profits generated by customers who were introduced by it, with the remaining 20% being retained by Pinnacle. Following the acquisition Accent Telecom North is now a wholly-owned subsidiary of Pinnacle Technology, and all net profit earned from its customers will be retained by the group.
Pinnacle has a similar, but less formal relationship, in relation to a number of customers it services in the Midlands, it said. It has reached an agreement with the introducer of business in this arrangement to pay a final settlement of GBP70,000 to buy the introducer out of the right to future commission payments.
Having done so, Pinnacle now has only one remaining commission based agreement with Accent Telecom South, in which it has a 30% stake and a similar deal as with Accent Telecom North.
Elsewhere, it has sold its 40% stake in voice over the internet software provider Stripe 21 Ltd to the majority shareholder of Stripe 21 for GBP385,000 in cash. Pinnacle said that this stake was not core to its business.
"At the time of the placing and acquisition announcement in January, we stated our intention to perform a full review of the Pinnacle business. There are a number of operational challenges but, before those can be resolved completely, the fragmented nature of the group needs to be consolidated," said Executive Chairman Gavin Lyons in a statement.
"It is critical that we have total ownership of our customers and that the value proposition is focused on higher value services that meet our customers' needs. These three transactions help consolidate ownership of customers and dispose of non-core assets. We remain focused on creating a strong 'IT as a Service' business and will continue to simplify the organisational structure of the Pinnacle business to maximise earnings," Lyons added.
Shares in Pinnacle Technology were up 4.4% at 7.44 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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