GCI snaps up rival in bid for ‘mini-BT’ status

GLASGOW technology firm Digital IP has been acquired by an English rival, GCI Telecom Group, in a deal thought to be worth around £10 million.

The survivor of the dotcom crisis employs almost 50 staff, with annual revenues over £4m. Clients include ScottishPower, Scottish Gas and Dell.

Although the selling price has not been disclosed, according to a senior IT source, Digital IP’s acquisition by its larger Lincoln-based competitor has attracted a premium, involving a figure of “at least twice turnover”.

Since its creation by managing director Keith Inch and technical director Dougie MacMillan in 1997, Digital IP has become a significant player in the telecoms and IT solutions industry.

It last year took on former Microsoft Scottish director Raymond O’Hare as a business consultant to advise on the best way forward.

Digital IP director Robert Adie confirmed the deal to Scotland on Sunday. He said: “GCI already has strong data centre and IT hosting capabilities but was attracted to our expertise in unified communications, especially voice and data tech solutions.”

The deal also gives GCI a strong Scottish presence and the move takes it significantly nearer to achieving status as a “mini-BT”, with a £100m turnover and big enough to attract much larger corporate and public sector clients.

GCI entered the recession with a sizeable war chest, and Digital IP is the latest in a series of acquisitions that go into double figures.

Analyst Simon Quickie of MicroScope.co.uk said the likes of Digital IP are benefiting as larger telecoms organisations open their wallets.

He said: “The outcome is GCI and others becoming a few large entities that aim to provide a complete infrastructure and telco package to small to medium firms.”

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