Beeks acquires Commercial Network Services assets in $1.4m deal

9th May 2019 10:30

(Sharecast News) - Cloud computing and connectivity provider Beeks Financial Cloud Group has acquired the assets of US-based online service provider Commercial Network Services (CNS) for a total consideration of up to $1.4m, it announced on Thursday.The AIM-traded firm explained that CNS specialised in hosting low-latency algorithmic trading systems, virtual private networks and streaming media from data centres in London, New York and Los Angeles.Founded in 2000, it provided services to around 1,000 retail traders across multiple geographies.CNS had annualised recurring revenue of approximately $1m, and delivered a profit before tax of $0.17m in the year ended 31 December.The transaction would bring additional customers and data centre locations to Beeks' retail offering, the board explained, and was also expected to deliver cost synergies.Beeks' board said the transaction was expected to be "earnings enhancing" within the first full year of Beeks' ownership.The transaction was in line with the group's stated strategy to grow both organically and through tactical and strategic acquisitions, it added.With an established customer base, high levels of recurring revenue and strong service offering, the board said the transaction added both scale and cost-synergies to Beeks' retail trader offering.Under the terms of the transaction, $1.3m would be settled in cash on completion, with $0.1m held as retention subject to satisfactory completion of warranties.The initial consideration and contingent consideration would be financed out of the group's existing cash balance and banking facilities."At the time of our IPO we stated our belief that the fragmented nature of our industry would provide us with the potential to augment our organic growth with both bolt-on and strategic acquisitions," said Beeks Financial Cloud chief executive officer Gordon McArthur."Commercial Network Services is a profitable business whose services reflect those we offer to retail traders."The business therefore fits well within our acquisition criteria and we anticipate will be a valuable addition to the group."