Calyx buys two Matrix divisions for £40m

The Irish-based computer and technology products and services supplier Calyx is to acquire two divisions of the UK Matrix group of companies for up to £40.5 million (€59.4 million).

The deal, which is technically a reverse takeover, must be approved by Matrix and Calyx shareholders. Calyx said yesterday that it is to acquire Network Partners Holdings and MXC, paying £33.5 million in cash, a further £2 million in cash with the remainder to be paid based on the achievement of performance targets.

At the same time Calyx has announced that it will raise £17.5 million through the placing of 25 million shares and will jointly list on IEX and London's AIM market. Some £11.5 million of the proceeds is to provide funds for the payment of the cash element of the acquisition. Trading in the enlarged group is expected to begin on June 12th.

The deal is Calyx's fifth and largest acquisition in the last year.

The Matrix companies are involved in consultancy, design, supply, implementation and ongoing support of ICT network solutions across different technologies and to the UK's public and private sectors.

Announcing the acquisition and share placing, Calyx chief executive Maurice Healy said the combined companies will provide a more complete service for its customers. "The scale of the group and the broad customer base, across both Ireland and the UK, provides an excellent platform for continued organic growth," he said.

The company said it had decided that it would be appropriate to seek admission to the Irish Stock Exchange's IEX market at this time. This will enhance the liquidity of Calyx's shares. Calyx shareholders will be asked to approve the deal on June 9th. Calyx shares have been trading on AIM since March 2005.

The company said the acquisition will allow it to expand its business in the UK. In recent years Calyx has been refocusing its business model on higher-margin services-based revenues.

Calyx said it has received irrevocable undertakings to vote in favour of the resolutions to approve the acquisition from 58 per cent of Calyx shareholders and from 31 per cent of Matrix shareholders.

The Matrix companies operate from headquarters in East Grinstead and regional offices in Rainford and Hook. Its customers include the BBC, BAR (Honda F1), Vodafone, LINX, Betfair, Galileo, Party Gaming, Red Bee Media, Test Valley and ARM.