“Founded in 1988, Farnham-based Diagonal is an IT staff agency/SAP consultancy that came to the main market in Mar. 97 at 275p, equivalent to a historic P/E of around 39. Their results since then have been exemplary.” So read the opening lines from the profile in the Holway Report 2000. Diagonal’s market cap was then (April 2000) £377m and it was turning over £72m p.a. with £8.2m in pre-tax profit.
Roll forwards to 2004 when Mike Phillips was FD at Microgen, and battled against Morse to buy Diagonal. Morse ‘won’ with a £50m cash and shares bid. Diagonal’s turnover was then down to some £56m.
Roll forwards another four years. Mike Phillips – by then FD at Morse – stepped up to become CEO and announced interim results showing Diagonal’s revenues for the half-year at £14m (see Morse – And then there were four). Diagonal finished the FY with revenues of £31m and a 3.8% operating margin (see Morse – still a long row to hoe).
Roll forwards another couple of years to April 2010 when 2e2 buys the by then totally ‘beleaguered’ Morse, for £70m in cash and shares (see 2e2 taps into Morse code).
Now we get to recent times, culminating with the 2e2 train wreck that saw bits flying off in all directions (start at Daisy chains up 2e2 data centres and work back).
And now Diagonal has been acquired by G3 Global. Who? Weybridge-based G3 Global is a privately held SAP consultancy serving the UK, Europe, Africa, and the US. Terms of the all-cash deal were not disclosed.
Finally, Diagonal finds an appropriate home!