TIDMIOM
RNS Number : 6901U
Iomart Group PLC
03 August 2022
3 August 2022
iomart Group plc
("iomart" or the "Group" or the "Company")
Acquisition of Concepta
iomart Group plc (AIM: IOM), the cloud computing company, is
pleased to announce that it has agreed to acquire the entire issued
share capital of Concepta Capital Limited ("Concepta"), a holding
company of a group of companies which includes the ORIIUM and
Pavilion IT brands, for an initial cash consideration of GBP10.5m
(the "Acquisition"). ORIIUM is a channel only IT service provider
specialising in data management solutions, and Pavilion IT is a
provider of cloud and hybrid infrastructure solutions and support
services.
Highlights
-- Acquisition of new complementary solution capabilities
and deep technical expertise in line with iomart's hybrid
cloud strategy
-- Significant new channel partner network, strengthening
iomart's indirect route to market
-- Addition of new direct and indirect brands with a diverse
customer base
-- Shared values and culture providing positive environment
for future growth
ORIIUM, established in 2007, is a channel-only organisation
working with value added resellers and managed service providers to
deliver best in class data and application management solutions to
end users. With this acquisition, iomart gains an independent
wholesale operation that understands the UK IT channel deeply and
has built trust through long-standing strategic partner
relationships. Data management is a core element of the Group's
hybrid cloud proposition, and ORIIUM materially strengthens
iomart's indirect sales channel capabilities, while extending the
Group's product and technical skills and capabilities, with an
additional 45 technical engineers joining the Group.
Concepta acquired Pavilion IT, a business established for over
30 years, in 2018 and in 2021 acquired P2 Technologies, a business
focussed on the legal and accounting professional services sector
to add vertical specialisation. This created a strong direct sales
organisation with over 250 customers under one unified operational
delivery team offering a range of hybrid and cloud infrastructure
technology solutions plus professional services and on-going
customer support arrangements. This customer base will have access
to iomart's hybrid cloud solutions and services.
Concepta had revenues of c. GBP10m and EBITDA (pre-exceptional
items) of c. GBP1.6m for the year ended 31 March 2022.
Completion of the Acquisition is subject to written confirmation
from the Department for Business, Energy & Industrial Strategy
in accordance with section 14(8)(b)(ii) of the National Security
and Investment Act 2021. This clearance is required as ORIIUM
provides data management services to UK government bodies. This is
expected shortly.
Chris Kiaie who established the ORIIUM business and formed the
Concepta Group will continue to lead the ORIIUM and Pavilion IT
businesses as their CEO, supported by his highly skilled and
experienced team. From a legal, financial and governance
perspective, they will be very much part of the Group.
Consideration
The maximum consideration payable for Concepta is GBP14.5m.
iomart will pay an initial cash consideration on completion of
GBP10.5m, subject to potential completion accounts adjustments. In
addition, a deferred contingent cash consideration of up to GBP4.0m
will be payable dependent on the future profit performance of the
Concepta business in the year ending 30 June 2023. Concepta
currently has bank debt of GBP1.5m which will be taken on by iomart
and settled as part of the completion process.
The initial consideration, debt settlement and any earn out
consideration will be 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
Chris Kiaie, CEO, having a majority stake. The acquisition is
expected to be immediately earnings accretive for iomart.
Reece Donovan, CEO of iomart Group plc, commented:
"We are delighted to welcome the Concepta team to iomart,
marking the resumption of our M&A activity in line with our
strategic plans. 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."
Chris Kiaie, CEO of Concepta, commented:
"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."
For further information:
iomart Group plc Tel: 0141
931 6400
Reece Donovan, Chief Executive Officer
Scott Cunningham, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Joint Tel: 020 7418
Broker) 8900
Edward Knight, Paul Gillam, James Smith
Investec Bank PLC (Joint Broker) Tel: 020 7597
4000
Patrick Robb, Virginia Bull, Sebastian Lawrence
Alma PR Tel: 020 3405
0205
Caroline Forde, Hilary Buchanan, Joe Pederzolli
About iomart Group plc
iomart Group plc (AIM: IOM) is a cloud computing and IT managed
services business providing hybrid cloud infrastructure, network
connectivity, security, and digital workplace capability. Our
mission is simple: to make our customers unstoppable by enabling
them to connect, secure and scale anywhere, anytime. From our
portfolio of data centres we own and operate across the UK to
connected sites around the world, our 400-strong team can design
and deploy the right cloud solution for our customers.
For further information about the Group, please visit www.iomart.com
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END
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