SMRT.L Regulatory News (SMRT)

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7 February 2014

Coms plc

("Coms" or "the Company")

Acquisition of certain subsidiaries of Actimax Acquisitions Limited and

Placing of 138,333,333 new Ordinary Shares

Coms (AIM: COMS), a leading organisation in the provision of end-to-end communication, connectivity and business services, is pleased to announce that it has today agreed to acquire certain subsidiaries of Actimax Acquisitions Limited ("Actimax") (the "Acquisition") for an initial consideration of £2.4 million payable in cash.

The Board is also pleased to announce that Charles Stanley Securities has placed, on the Company's behalf, 138,333,333 new ordinary shares (the "Placing Shares") at 6 pence per share, with certain institutional and other investors to raise £8.3 million (the "Placing"). The Placing was considerably oversubscribed. Further details of the Placing are set out below.

Information on Actimax and Background to the Acquisition

Actimax, trading as Cloudxl, is based in Basildon and is a managed network, unified communications and data services provider. The company provides solutions that encompass a range of services from traditional IT support and network services to hosted and virtualised solutions, over public and private cloud infrastructure. Actimax has 62 employees, of which 23 are engineers or engaged in technical support. Actimax was formed following the merger of several businesses in 2011, backed by private equity investment.

Actimax has approximately 800 clients, the majority of which are based in London and the South East, and its principal markets are Financial Services, Hospitality, Charities and the Public Sector.

46% of Actimax's revenue comes from Support, 34% from Hosting and Network Services and 20% from Equipment and Installations which deal with complex hardware and phone systems. The support contracts entered into with clients are typically between 1 and 5 years in length and are prepaid upfront annually.

Based on unaudited management accounts, for the year to 31 December 2013 Actimax had revenues of £10.54 million, gross margin of £4.4 million, broadly flat EBITDA and losses before tax of approximately £0.76 million. The Actimax business underwent some restructuring in 2013, ensuring that the company was placed in a good position for the future.

The Coms' Board has identified scope for further opportunities by combining infrastructure which will be capable of implementation during the current financial year. At this stage, the Board believes that the benefits of this could amount to approximately £3 million per annum in the medium term, with some "quick win" synergy tariff savings to be made and with the full benefit forthcoming in the Company's financial year ending 31 January 2016.

The Coms Board has also identified a working capital requirement at Actimax to clear creditors.

The Benefits of the Acquisition

In the Board's opinion the Acquisition will be highly complementary to the Company's existing businesses, with an extension of the customer base and the possibility to target cross-selling opportunities and increasingly deliver certain of Coms' services via the cloud. Significant investment has been made at Actimax and particularly in relation to its customer centric sales team. Consequently, Actimax has a wide spread of long standing clients with limited customer concentration and sound supplier relationships, each representing further opportunities for the business as part of Coms.

The Board believes that Coms is ideally positioned to maximize the benefits from the Acquisition on behalf of Coms' shareholders.

The Terms of the Acquisition

Coms has today reached agreement to acquire certain subsidiaries of Actimax. The initial consideration payable is £2.4 million, to be satisfied in cash from the proceeds of the Placing. Further consideration of up to £1 million in cash is payable 13 months from completion of the Acquisition ("Completion"), conditional upon the revenues achieved for the 12 months following Completion, with a minimum of £7.6 million being reached, and paid on a pro rata basis above this level.

Use of Placing Proceeds

After expenses, the Company will receive approximately £7.9 million and after payment of the £2.4 million cash consideration on Completion, this will be utilised as follows.

Actimax

As detailed above, the Board has identified a working capital requirement at Actimax of approximately £1.4 million, which is needed to alleviate creditor pressure following Completion. In addition, the Board anticipates that costs of approximately £0.6 million will be incurred in integrating Actimax into the Coms group.

Coms

Following a period of rapid and significant growth during the financial year to 31 January 2014, the Board has identified a requirement for further funding within the existing Coms' businesses, totaling £3.2 million. This will help accelerate Coms' organic growth strategy and the Board believes that it needs to expand the Company's disaster recovery capabilities in order to meet the demands of a larger organisation and an increasing sales pipeline. Included within the anticipated increase in headcount will be key contract management and project management personnel, call centre agents, account managers, specialist sales, finance, product development and operational support and training staff.

Further information on the Placing

The Company has placed 138,333,333 new ordinary shares at 6 pence per share, with certain institutional and other investors to raise approximately £8.3 million, before expenses.

The Placing is conditional, inter alia, on completion of the Acquisition and on admission of the Placing Shares to trading and it is expected that admission will take place on 10 February 2014. The Placing Shares will rank pari passu with the existing Ordinary Shares of the Company.

Application has been made for all the 138,333,333 new ordinary shares to be admitted to trading on AIM.

Following this allotment, the total issued share capital of the Company will increase to 960,123,201 Ordinary Shares. The Company does not hold any shares in treasury and therefore the total number of voting rights in Coms is 960,123,210. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a charge to their interest in, the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

Dave Breith, Chief Executive Officer of Coms, commented:

"We believe that the Acquisition offers an excellent opportunity to leverage the existing Coms infrastructure and buying power and work has already commenced in an effort to enhance the enlarged group.

Alongside this acquisition, the Coms' team is excited by the prospects of this next phase of accelerated growth that we are about to embark on.

We are also delighted to have received investment both from existing and a significant number of new institutional investors and I am delighted to welcome the new shareholders to the Company."

ENDS

For further information, please contact:

Coms plc +44 (0) 207 148 3000

David Breith (CEO)

Iain Ross (Chairman)

Charles Stanley Securities +44 (0)207 149 6000

(Nominated Adviser and Broker)

Karri Vuori / Philip Davies

Newgate Threadneedle +44 (0) 207 653 9858

(PR)

Robyn McConnachie / Alex White

Notes to Editors

Established in 2005, Coms is an end-to-end provider of telecommunications and IT services to business and industry. From hosted VoIP telephony to smart buildings to broadband to business infrastructure, Coms offers an unrivalled service built on innovation, passion and dedication. Unlike most VoIP providers, Coms does not rely on third party providers and we own and operate a UK based Carrier Class telephony platform. For more information, please visit www.coms.com.