October was another busy month for M&A in the ICT sector, though it was notable for who was making acquisitions. Many of those announcing deals this month were companies who have already made significant purchases this year.
Adam Zoldan, Director at Knight Corporate Finance, explained that the 30 M&A deals made across the ICT sector last month were split into scale and strategic categories. Knight itself was involved in four of this month’s deal completions, he added.
“Scale deals will add customers and the buyer will benefit from cross-sale and cost synergies whilst strategic deals bring new skills, products, or geographies to the buyers with most of these continuing the growing cross-pollination between comms and IT,” he told UC Today.
The month started off with Wavenet making the first of its two October purchases in the form of Telford-based NTS Communications. CEO Bill Dawson hailed the move as the start of another period of “massive growth” for the company.
NTS counts Mitel, Avaya, and Gamma among its partners. It offers contact centre, unified communications, cloud, and IT services to UK and international customers. Its addition is expected to bolster Wavenet’s presence and position in the UK, as well as adding experience and knowledge to the wider group.
He said:
“NTS join Wavenet at the start of another period of massive growth, this brings fantastic opportunities for the customers and employees of NTS”
“The acquisition also brings additional IT and cloud experience into the Wavenet group which, combined with Wavenet’s existing portfolio, gives our customers a vast range of solutions to help make their business brilliant.”
Dawson was certainly not fibbing when he made the declaration that the company was undergoing significant growth. Just two weeks after the NTS deal, Wavenet announced it had acquired Luton-headquartered Internal Systems Ltd (ISL).
Founded 24 years ago, ISL counts 3CX, Citrix, and Microsoft among its vendor partners. It specialises in building, deploying, and supporting a range of fast and secure network services. Wavenet stated that the rationale behind the ISL deal was that it bolstered its IT and cloud infrastructure capabilities.
“The additional IT knowledge ISL brings to the group will be invaluable as we continue to grow our IT support and security portfolio,” said Dawson of the second deal.
“This acquisition combined with our recent partnership with HPE GreenLake gives us an even stronger foundation to provide the very best cloud solutions to our customers across both enterprise and public sector.”
October also saw Onecom make another acquisition, this time with Exeter-based health specialist IP Office. Hampshire-headquartered IP Office expands Onecom’s presence in the UK, as well as adding healthcare expertise to the company’s widening portfolio.
Onecom Group CEO, Martin Flick, said of its latest M&A:
“As we continue to grow – supported by LDC – we are delighted to welcome the IP Office team and customers to Onecom in a move that further supports our mission to build on and extend our geographic presence by acquiring strong businesses that share our culture, values, and ethos”
“IP Office has demonstrable strength in the health sector which is an excellent complement to our already existing specialisms that bring proximity to specific customer need in distinct markets.”
The deal marked a hat-trick for Onecom this year, having also gobbled up Olive Communications and 9 Group. The comms provider secured £100m investment from private equity (PE) LDC two years ago to fuel its buy-and-build strategy.
Not to be outshone by its peers, Arrow Business Communications also announced a pair of acquisitions last month, the first with collaboration specialist Pescado.
Founded 15 years ago, the Godalming-based firm provides cloud telephony, mobility, cloud, and infrastructure solutions. Arrow then revealed at the tail end of October it had snapped up Cardiff-based Microsoft Gold partner Circle IT to bolster its Microsoft skills. In fact, Arrow CEO, Richard Burke, said that the purchase “completes” Arrow’s solution portfolio. Pescado and Circle mark the fourth and fifth acquisitions for Arrow so far this year.
Burke said:
“I believe this acquisition completes Arrow’s solution portfolio and ensures we continue to provide relevant solutions across our three customer demographics of Enterprise, Public Sector, and Mid-Market”
“The cultural alignment of the businesses has stood out throughout the acquisition process, which in addition to the high level of technical skill sets across the organisations that will enhance Arrow’s cloud, Microsoft, and networking capability even further following recent acquisitions, I’m sure the partnership moving forward will be a great success”.
PE-backed Focus Group also continued its M&A drive with Scottish Gamma partner GB Technologies to expand its presence in that region. It follows Focus’ purchases of HighNet and swcomms, as well as its merger with Resource Telecom late last year.
Focus also installed former Ensono MD for Europe Barney Taylor as its new CEO at the beginning of October, so this is certainly a company to watch out for in the market going forward.
Continuing the relentless M&A spree in the channel, ClouCoCo announced it had acquired a pair of companies from IDE Group. The MSP snapped up IDE Group Connect and Nimoveri in a deal it claimed will double its revenues to £27m. CloudCoCo secured the pair for a deferred consideration of £250,000.
CloudCoCo acquired Systems Assurance in August and its M&A spree is a part of its “Get Bigger” growth strategy.
CEO Mark Halpin declared the move “transformational” for CloudCoCo (although it should be noted that he said the same about the acquisition of Systems Assurance in August).
He marvelled:
“The acquisition of IDE Group Connect and Nimoveri is truly transformational for CloudCoCo and provides us with the scale required to target bigger customers with larger budgets, as well as serving as a great catalyst for future expansion”
“We have demonstrated our ability to reset, recover and grow businesses of this nature by keeping things simple, and we are confident we will be able to replicate the success of the past couple of years with the acquired businesses.”
Knight’s Zoldan described this month’s activity as “extraordinary” and the fact that many of the deals were made by companies already on M&A sprees speaks to the value PE houses see in the market.
“The four most active buy-and-builders Arrow, Babble, Focus, and Wavenet all announced acquisitions in October after also completing deals, illustrating the extraordinary drive and depth of funding of their private equity-backed management teams to significantly grow these businesses,” he said.
“We can confidently predict that this level of activity will continue – if our deals-in-progress is any measure – and we expect this to continue well into 2022.”
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