Iomart Regulatory News (IOM)

1st October 2013

iomart Group plc

("iomart" or the "Group" or the "Company")

Acquisition, Trading Update and Notice of Results

iomart, the cloud computing company, is pleased to announce the acquisition of the entire issued share capital of Backup Technology Holdings Limited and its wholly owned subsidiary ("BTL"), a leading provider of cloud data backup and disaster recovery services. The Company also provides an update on trading ahead of the announcement of half yearly results for the six months to 30 September 2013.

Acquisition of Backup Technology

The total consideration paid for BTL is £23m, satisfied through an initial consideration of £17.5m in cash and £3.5m from the issue of 1,205,857 new ordinary shares. A further deferred consideration of £2.0m is payable in cash on 31 January 2014.

Based in Leeds, BTL boasts an impressive customer portfolio of 200 enterprise clients including Siemens, British Red Cross, Lloyds Register, Suzuki and Pernod Ricard as well as Liverpool and Everton football clubs. Established in 2005 BTL now protects many Petabytes of data for clients. BTL has been a leader in cloud backup up since it was founded and has established a solid, well regarded, growing business providing an increasingly important element of a business's IT infrastructure.

For the twelve months ended 31 December 2012, BTL delivered turnover of £5.2m with an EBITDA1 of £2.4m and net assets of £2.3m. The cash consideration will be financed out of new banking facilities and the acquisition is expected to be immediately earnings enhancing before acquisition costs and normal acquisition adjustments including any fair value adjustments and the amortisation of intangible assets.

Current Trading

Trading in the first half of the year remains strong, with revenue and profits substantially ahead of the comparative period last year and in line with current consensus market expectations.

The Group continues to successfully execute on its focussed growth strategy of providing high quality and high margin managed solutions to corporate customers. With an expanding range of cloud services, through both organic and acquisitive means, iomart continues to build its reputation as the UK's leading cloud computing company.

Today's acquisition of BTL follows the acquisition earlier this month of dedicated server provider, Redstation, and the early integration of that business is progressing as planned.

Customer demand for iomart's services remains strong and growing, as the market increasingly shifts toward the provision of products and services over the internet. Strong market drivers, combined with high levels of visibility and customer renewals, leaves the Board optimistic for continued success.

Angus MacSween, Chief Executive of iomart, stated: "We are pleased with the continuing strong performance of iomart. The addition of BTL to the Group will further broaden and diversify our cloud-based offerings and enhance our position in the market. I look forward to the second half of the year and remain very confident in the growth prospects of the business."

Banking Facility

The cash consideration for the acquisition of BTL has been financed by a £35m debt package from Bank of Scotland made up of a £15m Term Loan and a £20m Revolving Credit Facility. Of the total facilities of £35m the company has drawn down £32.5m. £14m of this has been used to repay existing bank facilities and the balance has been used to finance the acquisition.

The Board believes the willingness of Bank of Scotland to provide the debt further underlines the Group's strong attractiveness to lenders.

The net debt position of the Company following this transaction will be approximately £26m. The Board anticipates that the cash generative nature of the existing business which will be further enhanced by this acquisition will enable all debt service metrics to be met and allow the Group to repay debt going forwards as it falls due.

Additional Listing

Application has been made to the London Stock Exchange for the new ordinary shares, which will rank pari passu with the existing shares in issue, to be admitted to trading on AIM, and admission is expected to become effective on 4 October 2013. The Company's total issued share capital after the admission of the new ordinary shares will be 107,786,339 ordinary shares. There are 140,773 ordinary shares in the iomart Group plc Employee Benefit Trust and the Company holds 1,023,453 of its ordinary shares in treasury. Therefore the total number of ordinary shares with voting rights in the Company is 106,622,113. This figure of 106,622,113 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Notice of results

The Group expects to report half yearly results for the six months ending 30 September 2013 on 10th December 2013.

1 EBITDA means earnings before interest, tax, depreciation and amortisation

About iomart Group plc

iomart Group is one of the UK's leading providers of cloud computing services. From a single server through to private cloud networks, iomart specialises in the delivery and management of mission-critical hosting services, enabling customers to reduce the costs, complexity and risks associated with maintaining their own cloud applications.

By physically owning and managing its own infrastructure, including 10 state-of-the-art data centres in the UK, all connected by its own fibre network, iomart offers world-beating levels of service to its customers. The Group offers a unique 100% uptime guarantee with all hosting services being engineered to ensure no single point of failure.

iomart Group operates in its chosen markets through a number of subsidiaries: iomart Hosting, RapidSwitch, Melbourne Server Hosting, Easyspace, and iomartcloud. The Group is listed on the London Stock Exchange's Alternative Investment Market (AIM:IOM).  www.iomart.com