Glasgow tech firm Iomart cheers 'meaningful' multi-million-pound acquisition

Glasgow-based tech firm Iomart Group has inked an acquisition worth up to more than £11 million, saying the deal marks a “meaningful” step in its strategy as it gets ready for its next growth phase.

The Aim-quoted cloud computing specialist has shaken hands on acquiring Extrinsica Global Holdings, the holding company of Extrinsica Global, a Microsoft Azure Cloud services provider with offerings including managed Azure Cloud, Azure solution design and implementation services, support and optimisation services and licencing.

The initial consideration for the transaction is £4m, with a potential further £300,000 in cash payable on the achievement of certain key customer targets, with a further £4m to £7m of contingent earn-out payments based on Extrinsica’s profitability, for example. Iomart said the deal provides it with in-depth Microsoft Azure expertise, a team of 33 based in the UK, while Extrinsica co-founder Simon Smith will continue to lead the business as chief executive.

Iomart boss Reece Donovan said: "We are delighted to welcome the Extrinsica team… providing a large step forward in [our] capabilities to support existing and new customers in their use of Microsoft’s Azure cloud platform. Simon and the team have been at the forefront of the market developments of Azure since 2017 and have deep skills and expertise in this in-demand area of cloud computing, which will accelerate the initial investments we have made in our own Microsoft resources and capabilities.

“This is a meaningful step in our strategy as we position the group for its next phase of growth as a leading secure hybrid cloud business."

Mr Smith said: "Joining Iomart marks an exciting phase for our... team, providing us with a strengthened platform for growth. It allows us to leverage joint capabilities, capitalise on our understanding of the markets we operate in and build upon our significant achievements to date. The team and I are all incredibly excited to be working as part of the wider group and look forward to being a key part of driving Iomart's ongoing success."

Iomart last year kicked off a fresh acquisition spree with the takeover of IT provider Concepta Capital in a deal worth up to £14.5m, while in April of this year it flagged record annual revenues of £115m and “positive momentum” heading into the new financial year despite a spike in energy costs.