Bracknell-based application service provider (ASP) Netstore has acquired SMS specialist RedRock for an estimated £2.4m.
Pending shareholder approval, expected by 21 December, the vendor will become a wholly owned division of Netstore, but will retain the RedRock company and brand name, according to Stephen Anderson, managing director of RedRock. The deal will be good for its channel partners, he said.
"There are always going to be customers who want to own the software and implement it themselves, but others are going to want it as a service, such as the ASP model," he said. "Now our resellers will have the choice of selling software as a service or a solution."
Anderson explained that there will always be an overlap between ASPs and some channel players, but that generally the model provides good reseller opportunities.
"This deal will enhance our product offering and our resellers have nothing to worry about; the channel is still our preferred method of selling. All the staff in both companies are very excited about the deal; it is not a cost cutting exercise," he maintained.
Neil Lloyd, chief financial officer at Netstore, said: "Now is a good time to make an acquisition because there are a lot of businesses out there that could be very profitable with a little investment.
"RedRock is a strong, well run company and we have been interested in SMS for quite some time. Although SMS has not penetrated the corporate market that deeply yet, it is a definite growth area."
Lloyd explained that it has been no secret that Netstore has retrenched from small to medium sized enterprise channel activities and deals only with larger partners. "RedRock's channel strategy works, and we have no plans to change it," he said.
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