Glasgow cloud computing firm Iomart seals 'strategic' takeover deal worth up to £14.5m
Bosses said the acquisition of Concepta Capital, a holding business for a group of companies that includes the Leeds-based Oriium and Sheffield-based Pavilion IT brands, would add “new complementary solution capabilities and deep technical expertise” to Iomart’s offering.
The Scottish group is to pay an initial cash consideration on completion of £10.5m. In addition, a deferred cash consideration of up to £4m will be payable dependent on the future profit performance of the Concepta business in the year to next June.
The deal is being financed through a combination of existing bank facilities and cash on the company’s balance sheet.
The vendors of Concepta are the existing management team, with chief executive Chris Kiaie having a majority stake.
He added: “After careful assessment of the market, in Concepta we found a business and team that fits within our strategic growth plan by extending the group’s product, skills and capabilities, strengthening our direct and indirect routes to market, and complementing the group’s strong financial model.
“Oriium has a long track record and strong reputation across the indirect channel which allows us to broaden our reach whilst enhancing our expertise within the data management service layer. Pavilion IT provides a new and diverse customer base adding scale, technology and geographical coverage to our existing infrastructure reselling and support activities.
“This is a meaningful step as we position the group for its next phase of growth as a leading secure hybrid cloud business.”
Kiaie said: “Joining Iomart marks the beginning of the next phase of growth for Concepta, and is a very exciting time for our highly skilled, experienced and ambitious team. It allows us to leverage joint capabilities, capitalise on our understanding of the markets we operate in and build upon the significant achievements to date.
“Identifying a business that shares our culture, goals and aspirations was incredibly important, and Iomart’s commitment to exceptional customer service, team wellbeing and personal development represents our values perfectly.
“The team and I are all incredibly excited to be working as part of the wider group and look forward to being part of Iomart’s incredible ongoing success.”
Kiaie, who established the Oriium business and formed the Concepta Group, will continue to lead the two businesses as their chief executive.
In June, Iomart said it was having to pass on higher energy costs to customers but was confident businesses would continue to invest in their IT provision despite the economic squeeze.
Releasing full-year results in line with figures flagged in April, the firm said it continued to benefit from a “robust business model” delivering strong levels of recurring revenues, amounting to 93 per cent of group revenues. A reduction in overall revenue, to £103m from £111.9m a year earlier, reflected lower non-recurring equipment and consultancy sales, along with lower customer renewal levels at the start of the year, which have since returned to normal levels.
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