New vehicle for Smyth
Article Date: Aug 19 2005Scottish entrepreneur Edward Smyth, who sold IT solutions business Stiell to Alfred McAlpine for £85 million, is emerging as a key player in Telephone Maintenance Group (TMG).
Chaired by City solicitor and Liberal Democrat peer Lord Razzall, AIM-quoted TMG, which has some big corporate clients but still lost £63,000 in the six months to January, intends to issue shares worth £565,000 at a notional 2.5p to buy Cassydora, a company set up recently by Smyth. If approved by shareholders on September 13, the deal will give Smyth around 20 per cent of an enlarged TMG, which is being advised by Bristol broker Rowan Dartington.
Cassydora is poised to enter a strategic alliance with Alba Management Consultancy, another Smyth company, which provides facilities management services to major corporate clients. Alba has a name similar to a previous Smyth company, Alba Management Consultants Ltd, which won backing from 3i and others to create Stiell Group, a specialist IT and network 'solutions' provider that was eventually sold to McAlpine in 2002 for some £85 million, reaping investors a handsome reward.
For Razzall and TMG's managing director Jeff Williams, this could prove a significant step for their Bromsgrove-based company, whose AIM value is only £1.99 million. The hope is that the strategic alliance with Alba will add facilities management to complement TMG's telephony services to corporate customers.
Smyth has agreed to a virtual 'lock-in'. He will not sell any TMG shares for 12 months after the deal nor at any time after that below a price of 7p – more than three times today's level – without board permission, 'which may only be given in exceptional circumstances'.
Floated last September at 3.5p, TMG's shares have recently traded below 2p. Up 0.13p today to 2.13p, they could make progress now if the deal with Smyth bears fruit.
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