SysGroup has closed an oversubscribed placing and subscription to raise gross proceeds of £11 million.
The London-listed group, which earlier this year moved its headquarters from Liverpool to Manchester, specialises in the delivery and management of cloud, data and security services.
It has positioned itself as a technology partner to SMEs looking to harness artificial intelligence transformation, saying it has a growing pipeline of opportunities in this area.
The placing has raised gross proceeds of £8.9m through the placing of new ordinary shares to investors. The subscription has raised a further £2.1m through the subscription of new ordinary shares by directors, one manager and ‘certain sophisticated investors’.
The company is also providing all shareholders with the opportunity to subscribe for further shares, to raise up to £500,000.
Approximately £2m of the proceeds is intended to be used to fund an internal transformation project to provide the group with systems utilising AI-driven technologies. A further £2m will be used to meet the contingent earnout payment due in August 2024 in relation to the acquisition of Truststream Security Solutions.
The remainder will strengthen the balance sheet to provide for ongoing working capital requirements as the business continues to drive growth, as well as liquidity for M&A opportunities.
“We are pleased with the level of support from our existing shareholders and are delighted to welcome a number of new investors to the register who share our vision for the business in its next stage of growth,” said Heejae Chae, executive chairman.
“We trust that the retail offer provides smaller shareholders the opportunity to participate also.”
For the year ended 31st March 2024, group revenues increased 5% to £22.7m, driven by a significant 14% increase in the second half of the year, and expects to report adjusted EBITDA of approximately £2m.
SysGroup’s share price this morning climbed to 35.5p following the news. It reached 49p during COVID but bombed to 20p for two months in late 2022 before bouncing back.