Alan Bonner, CEO of Edinburgh-based Pinnacle Telecom Group, hailed the acquisition of Accent Telecom last month as a ‘pivotal transaction'. Not content with that, Bonner plans to further extend Pinnacle's reach.

The cost of £661,450 for Northampton-based Accent was met by the issue of 508,807,826 shares at 0.13p, which gives Pinnacle a massive volume of over 1.7 billion shares in issue. Pinnacle has acquired, in what Bonner describes as a ‘pivotal transaction', a company which also owns a 30 per cent stake in two independent resellers trading under the Accent brand. One is based in Stockton-on-Tees and one in Middlesex, and both exclusively sell Accent's services into the SME sector.

Bonner commented: "Accent brings other valuable assets to the table. It owns 40 per cent of Stripe 21, a fast growing network solutions business with headquarters in Dorking. Stripe 21 provides state-of-the-art IP based services to SMEs and corporate customers. In addition it owns 33 per cent of CityX, which aims to deliver high quality voice over broadband services to multi-sited businesses."

An upbeat Bonner is confident about future growth prospects. "Pinnacle is debt free, which I believe is a major advantage in the current economic climate. Building a telecoms group of substance in the current financial downturn is challenging, doing it while listed on the London Stock Exchange brings additional challenges. However, it does allow us to fund our growth with equity rather than debt. It follows that we have had limited access to wholesale money markets, but an absence of debt gives us access to the capital markets, should the need ever arise. The Accent acquisition will increase turnover significantly, give the enlarged group the benefits of economies of scale and deliver greatly increased national geographic coverage."

Bonner confirmed that Darron Giddens, Accent's founder, and Paul Goodland, its other major shareholder, will both remain with the firm. Giddens was previously the Finance Director of an AIM listed company. Bonner also noted that Pinnacle is able to adapt to fast changing market conditions. "Pinnacle began as a cellular service provider that won 52 per cent market share in Scotland before diversifying into fixed line services in 1998," said Bonner.

He previously amassed a 2000 per cent revenue increase in a five year period, founded on both on organic growth and carefully planned acquisition. Bonner added: "We acquire to add real value to the business. In 2005, for example, we acquired The Bureau of Communications, a mobile phone specialist based in Coventry; and in June last year brought Colloquium, Scotland's oldest ISP into the group."

The Accent acquisition was driven by more than numbers, said Bonner. "Of course, there's a strong additional revenue stream. In the fiscal that ended in March, Accent's revenues were £3.5 million, it had net assets of over £330k and only minimal debt of £42k. The important thing is that we will achieve rapid, seamless integration because Pinnacle and Accent share similar cultures, a hurdle at which less well considered acquisitions often stumble.

"It's a good match because we are both focused on delivering growth through channel partners. Pinnacle is a PTO that now has an extended national presence with a fibre optic connection to BT, Thus and NTL. Our range extends from WLR2 and WLR3, NGNs and conferencing services, to broadband, Internet solutions, traditional CPS voice, IT hardware installation and maintenance and a broad range of converged voice and data solutions, including hosted telephony. Our mobile proposition indicates how well we can customise services with connections to five networks and a choice of 144 tariffs."

Bonner hasn't yet exhausted his appetite for further acquisitions, saying: "We intend to expand Pinnacle's reach even further through carefully considered bolt-on opportunities. We're in a business where you can't fall behind the pace and we are determined to deliver a continually improving level of service to our customers, while strengthening our channel partner offering."

When Pinnacle's acquisition of Accent was announced it hit the sweet spot in the stock market as the Pinnacle share price rose by over seven per cent. Bonner's sizeable personal stake in the business means that movement like that concentrates his mind wonderfully. "The credit crunch hit us hard. We saw the Pinnacle share price fall along with others listed on the equity markets. However, I am delighted that our stock has escalated 180 per cent in the last six months."