West Lothian tech firm Calnex seals £3.5m acquisition amid record order book

Calnex Solutions, the West Lothian technology business, has sealed a key multi-million-pound takeover as it gears up to unveil market-beating annual profits.

The Linlithgow-based company, which in 2020 became the first Scottish stock market flotation in two years, has acquired iTrinegy, a developer of test networks technology for the software application and digital transformation testing market.

It is paying £2.5 million in cash with up to a further £1m dependent on achievement of agreed financial targets.

Founded in 2006 and headquartered in Stevenage, iTrinegy supplies testing tech for the financial, gaming, military and government sectors.

Tommy Cook, chief executive of Linlithgow-based Calnex Solutions. Picture: Peter Devlin

The company’s customer base includes organisations such as Juniper Networks, JPMorgan Chase and Ubisoft Games. In 2021, iTrinegy was awarded the Queens Award for Export Achievement.

Calnex said it plans to scale the business by using its sales and marketing capabilities to build, support and grow a reseller network, particularly into the US, to accelerate sales.

Meanwhile, the Scots group told investors it had made “solid progress” on delivering its strategy in the 12 months to the end of March and continues to experience high demand for its range of test and measurement services.

In a March trading statement, the company had warned of reduced availability of certain components in recent months, in line with the ongoing global semiconductor shortages. However, the firm has successfully managed these constraints and has shipped all orders scheduled for March as planned.

As a result of this, the board now expects results for the past financial year will be slightly ahead of current market expectations.

The firm added: “Calnex’s order book continues to build and currently sits at record levels heading into [the new financial year] which provides the board with confidence in the group’s ability to deliver significant, sustainable growth over the coming years.

“The company expects to release final results for the year ended March 31, 2022 on May 24 and will provide further guidance on prospects for [financial year] 23 and FY24 at that time. The acquisition of iTrinegy is anticipated to be earnings accretive in FY23 and to be an important contributor to Calnex Group profit in subsequent years.”

Tommy Cook, founder and chief executive, said: “We are delighted to welcome the iTrinegy team to Calnex. With both businesses developing high quality, complex, technical testing solutions, trusted by some of the world’s most demanding organisations, we are particularly excited by the strategic fit of the two organisations.

“The cloud migration taking place across multiple sectors and the growth in internet-based applications is fuelling demand for test solutions that can analyse, predict and verify application performance over complex, distributed networks.

“We see great opportunity ahead for the NE-ONE technology and look forward to working together to accelerate iTrinegy’s growth and open up new customer segments for Calnex.”

He added: “Following a strong FY22 and a record order book heading into the new financial year, we look to the future with confidence.”

Calnex provides test instrumentation equipment to some of the world’s biggest telecoms companies. In January, the group bolstered its board with the appointment of two highly experienced directors.

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