Redstone agrees to buy IT firm Maxima

Managed services provider Redstone has agreed to acquire IT business systems Maxima for approximately £9.9m or 28p per Maxima share.

If the deal is approved, Redstone will seek to raise a gross £3m via a share offering at 1p per Redstone share. This represents a premium of 27.4 per cent to the closing price of 0.785p per Redstone share on 14 September 2012.

Proceeds from the placement will be used to fund the acquisition and the implementation of synergies between Redstone and Maxima. Proceeds will also used to meet the costs associated with the acquisition and provide the enlarged group with general working capital, Redstone explained in a company statement.

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Redstone will hold a general meeting at which resolutions to approve the placing will be put to shareholders.

Redstone added the acquisition should yield cost savings of around £2.3m and be earnings enhancing, following implementation of cost synergies. Maxima's Indian operations are expected to deliver significant service and cost benefits to the enlarged group, it said.

Commenting on the acquisition, Redstone chairman Richard Ramsay said: "The enlarged group will benefit from enhanced scale, an enlarged client base with increased cross selling opportunities, a broader technical offering and a reduced cost base."

"We are excited by the opportunities for the Enlarged Group to capitalise on its position as a leading independent UK managed services provider and to deliver healthy profit margins."

Michael Brooke, Senior Non Executive Director of Maxima, said: "Having fully explored potential disposal options for Maxima's core Managed Services, Infrastructure and Applications division, the Independent Maxima Directors believe that the proposed terms of the acquisition would result in a better financial return for Maxima shareholders."

CJ