Pinnacle eyes further deals after snapping up MacLellan IT

PINNACLE Telecom chief executive Alan Bonner remains on the hunt for more bolt-on acquisitions after yesterday snapping up Fife-based MacLellan IT in a £1 million all-share deal.

Stirlingshire-based Pinnacle - which last year recruited former Thus chief executive Bill Allan as its chairman to succeed founder Graham Duncan - said that taking over the Kelty-based firm would "further strengthen its presence in the SME market".

Aim-quoted Pinnacle, which is best-known for setting up temporary phone and data networks for pop concerts and outside broadcasts, will issue more than 186 million shares at 0.57p each to complete the deal.

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The 0.57p value comes at a 58 per cent premium to Friday's closing price of 0.36p. Shares last night closed up 4.2 per cent or 0.02p at 0.38p.

Former Atlantic Telecom chief executive Duncan set up the business, then known as Glen Group, in 2002 and floated the company in 2006.

The group underwent radical changes in 2007 when it bought Pinnacle Telecom, changed its name and switched from focusing on one-off projects to securing repeat business.

The owners of MacLellan IT - who are listed at Companies House as Ian MacLellan and Katherine Melton-Scott - will be unable to sell their shares in Pinnacle for 20 months.

The deal has been structured as a sale of the business and assets; Pinnacle isn't buying MacLellan IT's share capital so that it can more quickly fold the company into its business rather than adding another limited company to the Pinnacle group.

Bonner said: "This latest acquisition is clearly earnings-enhancing, it is also an all-share deal with lock-in provisions, which preserves cash, aids an orderly market and keeps the company free of bank debt."

MacLellan IT, which was founded in 1999, returned an operating profit of 240,000 in the year to 30 June on turnover of 879,000. In the previous 12 months, the firm had made a profit of 273,000 on revenues of 972,000.

Melton-Scott, the IT firm's managing director, said: "We've waited a long time to find a company that reflects our commitment to outstanding customer service and value for money."

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Melton-Scott and all nine members of staff will transfer across to Pinnacle, which will also develop MacLellan IT's Mainstay software - a management system used by hotels and guest houses - into a "cloud" application that can be used across the internet.

Pinnacle has completed a series of high-profile contracts over the summer, including last weekend's Women's British Golf Open at Carnoustie, which was won by defending champion Yani Tseng from South Korea.Other events covered by the firm include May's Holyrood elections for the BBC and the royal wedding in April, at which Pinnacle's circuits were used by the BBC, CCN, Australia's Seven Network and Global Television Network from Canada.

Concerts at which the firm has operated this year include BBC Radio 1's "Big Weekend" in Carlisle, which featured Black Eyed Peas and Lady Gaga, and the T in the Park at Balado, near Kinross, at which fans watched Beyonce, KT Tunstall and Blondie.