Pinnacle has sold the largest chunk of its business – comms support arm Pinnacle CDT – to Chess in a move it sees as a key step in its repositioning as an "IT-as-a-service" business.
Following the sale of its security business RMS Managed Security for £1 two weeks ago, Pinnacle has disposed of Pinnacle CDT to Chess for £2.8m in cash.
Pinnacle said the proceeds will be used to plough on with its plans to consolidate the "highly fragmented market of smaller IT services companies to become a provider of IT-as-a-service" to UK SMEs.
Pinnacle CDT provides data, telecoms and IT support services to nearly 1,000 customers from offices in Glasgow and Stockton-on-Tees, and last year posted a net loss before tax and head office costs of £0.2m on sales of £6.7m.
AIM-listed Pinnacle said the fact that the business owned its own network and proprietary software meant it was at odds with its strategy of not owning its own infrastructure.
Pinnacle's focus is now entirely on integrating recent conquests Ancar-B and Weston Communications and making further acquisitions, chief executive Gavin Lyons (pictured) said.
"The disposal represents a significant step forwards in achieving our strategy of creating a strong IT-as-a-service business with recurring revenues and higher-margin services," said Lyons.
"When I was appointed on 15 December, it was apparent that there were many legacy and operational issues that needed to be addressed within the group. Through the disposals of Pinnacle CDT, RMS Managed Security and Stripe 21 we now have a stable financial and operational platform to build on."
Chess' turnover swelled to £74m in its most recent annual results on the back of the more than 90 acquisitions it has made in its history and its director Richard Btesh said its most recent conquest underlines its M&A pedigree.
"This latest acquisition demonstrates to other potential sellers in the telecoms, data and ICT sector that Chess remains the stand-out choice for those selling all or part of their business. Our acquisition machine is primed to take advantage of the consolidation of customers and relationships," he said.
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