Iomart nets £60m fund to fuel more acquisitions

CLOUD computing and web hosting specialist Iomart is on the hunt for more acquisitions after securing a £60 million funding package.

Angus MacSween, chief executive of Iomart. Picture: Contributed

The Glasgow-based firm said the facility, provided by Bank of Scotland, would give it the “firepower” to capitalise on opportunities to expand its presence across the UK, where it owns and operates eight data centres.

Aim-quoted Iomart last month struck a deal, worth up to £13m, to buy London-based consultancy SystemsUp to help broaden its reach in the “incredibly complex” cloud computing arena.

Sign up to our daily newsletter

The i newsletter cut through the noise

The acquisition was the firm’s biggest since it shelled out £23m in 2013 on Leeds-based disaster recovery specialist Backup Technology, which boasts Everton and Liverpool football clubs among its list of clients.

Angus MacSween, chief executive of Iomart. Picture: Contributed

In December, Iomart bought another London firm, cloud hosting provider ServerSpace, for up to £4.2m, depending on performance levels in the period ending September.

That deal came shortly after rival technology group Host Europe, controlled by private equity firm Cinven, pulled out of plans to buy Iomart for £321m.

The group, which employs about 380 people, saw its annual revenues jump 18 per cent to £65.8m in the 12 months to the end of March and has set itself a goal of growing that figure to more than £100m within the next few years.

Finance director Richard Logan said: “An ambitious growth strategy needs strong financial foundations.

“The combination of this increased facility from the Bank of Scotland and our own operating cashflow gives us the liquidity to make further acquisitions.”

Chief executive Angus MacSween has said that the firm, which he co-founded in 1998, rejects about 90 per cent of the opportunities that come its way because of its “disciplined criteria” and he is keen to pursue larger deals in order to boost revenues.

MacSween, who has a stake of about 17 per cent of the company, said yesterday: “Our ambition is to be the market leader in the UK for cloud and managed hosting services, including the growing opportunity to provide hybrid cloud.

He added: “We will continue to look for well-positioned businesses that can give us the specialist skills and knowledge we need to achieve that, knowing we have the firepower to move quickly when the right opportunity arises.”

Annual results published last month showed that adjusted pre-tax profits at Iomart came in at £16.6m in the year to 31 March, up from £14.6m a year earlier.

Andy Seaton, relationship director at Bank of Scotland, said: “We have been pleased to assist the business through a number of acquisitions in recent years, including the purchase of SystemsUp. We look forward to continuing to support the business’ future growth strategy and capital expenditure programme.”