It was almost exactly a year ago to the day that Kelvin Harrison, the affable founder and executive chairman of the venerable but troubled mid-market software and IT services firm, Maxima, invited IT entrepreneur Ian Smith to join the board as a non-executive director (see Maxima adds ‘buy-and-build’ Smith to the Board) after failing to sell the company holus bolus (see Maxima takes down "for sale" sign). A month later, Harrison was out and Smith was running the show, and commenced a sell-down of some of the many and various bits of Maxima deemed surplus to requirements (see More minimisation at Maxima).
Today came the coup de grace with the sale of the remaining bits of Maxima to managed infrastructure provider and reseller Redstone, in an all share deal which values Maxima’s market cap at a shade under £10m, a 38% premium to its last close, representing an enterprise value a little under £14m.
Smith is an executive director of Redstone and in effect controls over 17% of the stock. He is also ‘part-time’ executive director of IT security services buy-and-build vehicle Accumuli, with a 14% holding in the company (see Smith accumulates more of Accumuli). Of course, as an ‘interested party’, M&A consultancy MXC Capital, owned by Smith and Redstone CEO Tony Weaver, was not involved in the Maxima sale.
Assuming the deal goes ahead, Redstone aims to raise £3m gross through a 1p a share placing, a 27% premium to last close. MXC Capital will toss £550k into the pot, slightly diluting Smith’s share of the stock.
Maxima also announced its FY results (to 31st May) today, with pre-tax losses down from £7.8m in FY11 to £6.6m, on revenues of £28.2m, 14% lower yoy. Redstone also lost money last year (to 31st March), though the £1.6m pre-tax loss was a considerable improvement over the £6.6m loss the prior year. Redstone’s revenues were essentially flat at £67m.
It’s hard to know where to begin on this one, so I think I might have a little lie-down to let it all sink in, and then write more (for TechMarketView subscription service clients only, of course) in UKHotViews Extra later.