Tech Market View28 Apr 2015 14:14
MXC cornerstones Pinnacle Technology rescue:
Like a knight in shining armour, AIM-listed technology-focused merchant bank and turnaround specialists, (and TechMarketView Little British Battlers sponsor) MXC Capital, has come to the rescue of struggling AIM-listed buy-and-build telecoms managed services play, Pinnacle Technology Group.
MXC is subscribing to nearly half the shares in a £860k (gross) placing at 6.5p per share, a 16% premium to last close. As a result, MXC will hold 10% of the expanded equity and gains a seat on the Pinnacle board. MXC has also been granted conditional 7 year warrants over 5% of Pinnacle’s stock at the placing price.
Pinnacle got itself into all sorts of trouble in 2011 with a number of ‘cheap’ acquisitions of loss-making businesses with significant liabilities which management found themselves unable to turn around (see Pinnacle Technology facing long, painful turnaround). A little light shone through the tunnel a month ago when Pinnacle announced a partnership agreement with O2 to provide mobile, digital and accredited public sector solution services to Pinnacle's client base (see Turnaround beginning to take shape at Pinnacle).
This sort of deal is right up MXC’s street. The business, founded by entrepreneurs Ian Smith and Tony Weaver, and now with its merchant banking activities led by CEO Marc Young, has been extremely active in the UK tech sector of late (start with Calyx MS finds new home at Redcentric and work back). MXC is definitely not a passive investor in any shape or form, so we can expect to hear more about the fortunes of the Pinnacle business in due course.