Communications VAR Azzurri plans to target larger acquisitions after its private equity buy-out.
CRN predicted last week that Azzurri could perform a U-turn on its plans to float on the stock exchange (CRN, 10 April), and that it had been targeted by a private equity investor.
Azzurri was then acquired by PPM Capital, the private equity arm of Prudential, for £182.5m, as revealed by CRN online.
Martin St Quinton, chief executive of Azzurri, told CRN that the VAR will use the backing of PPM to build on its 15 previous acquisitions.
“The deals we have done in the past have been firms with a turnover between £1m and £20m,” he said. “We won’t stop buying in this bracket, but we will work on some more upscale acquisitions in the £20m to £50m turnover bracket.”
St Quinton said Azzurri’s decision to sell to PPM, rather than go ahead with a planned flotation, was due to PPM’s “very compelling offer”.
“I would expect the relationship [between Azzurri and PPM] to give us support for both organic and acquisition growth,” he said. “PPM shares our vision, and you can be more nimble as a private company.”
St Quinton added that PPM will also transform the VAR into a more complete convergence player.
“We are seeing customers who want to deal with one organisation for voice, data and mobile,” he said. “They don’t want three separate suppliers.”
James Barton, director at PPM Capital, said of its reasons for the Azzurri buy-out: “We look for businesses with a good management team. The converging voice and data market is a good place to be and we plan to support Azzurri on the acquisition front.”
Alex Black, strategy director at VAR Affiniti, said: “It is always quicker to grow with acquisitions, rather than organically. Acquisitions can bring good results quickly, but you have to be careful.”
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