Linlithgow’s Calnex buys iTrinegy of Stevenage

Calnex CEO Tommy Cook

Linlithgow-based telecoms testing and measurement firm Calnex Solutions plc on Tuesday announced the acquisition of Stevenage-based iTrinegy Limited, a developer of “software defined test networks technology for the software application and digital transformation testing market.”

Also on Tuesday, Calnex published a trading update confirming its full-year results “will be slightly ahead of current market expectations.”

Calnex went public at 48p per share in October 2020 and its shares have since soared to around £1.60 to give the firm a current stock market value of roughly £140 million.

On the iTrinegy acquisition, Calnex said: “The consideration, calculated on a cash-free, debt-free basis, is £2.5m in cash on completion with up to a further £1.0m dependent on achievement of agreed financial targets …

“iTrinegy’s customer base includes organisations such as Juniper Networks, JPMorgan Chase, Ubisoft Games and the Government and Military in the UK and US …

“Calnex 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.

“iTrinegy generated revenues of approximately £1.4m in the year to 30 September 2021, with a gross margin of around 80%.

“Approximately 60% of iTrinegy’s revenue was from North American customers. The business is being acquired on a cash free, debt free basis.

“The consideration comprises an initial cash payment of £2.5m, with up to a further £1.0m potentially payable in a combination of new ordinary shares in Calnex and cash …

“The Earn-out Payment is subject to the achievement of certain sales targets from iTrinegy products in the year to 31 March 2024. A maximum of 322,579 new shares will be issued under the Earn-out Payment.”

Calnex said in its trading update: “Calnex has made solid progress on delivering its strategy in the 12 months to 31 March 2022 (FY22) and continues to experience high demand for its range of test and measurement solutions.

“The company recently noted, in the trading update issued on 1 March 2022, that it had experienced reduced availability of certain components in the final quarter of FY22, in line with the well documented and ongoing global semiconductor shortages.

“The company has successfully managed these constraints and has shipped all orders scheduled for March as planned. 

“As a result of this, the board is pleased to confirm that the results for FY22 will be slightly ahead of current market expectations.

“Calnex’s order book continues to build and currently sits at record levels heading into FY23 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 31 March 2022 on 24 May 2022 and will provide further guidance on prospects for FY23 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.”

Calnex CEO Tommy Cook 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.

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

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.