Maintel CEO Eddie Buxton says the firm has "a lot to do" to integrate newly-acquired Intrinsic into the business, despite the industry expressing its surprise at the fee paid.
The AIM-listed VAR announced the £5.25m acquisition of Intrinsic earlier today, in a deal which it said will create a £160m company.
Speaking to CRN Buxton said Intrinsic had been marketed to potential suitors, with Maintel eventually coming through as the successful bidder.
Buxton said that others in the industry have been surprised at the relatively low price Maintel was able to snap up Intrinsic for.
"That's the reaction from the peers in the market that have been writing e-mails to me," he said. "We're not going to underplay it, we still have a lot to do to integrate and drive that business.
"The interim management team that has been there for the last 12-18 months has done a great job sorting out some of the basics, but we're quite pleased with what we paid for it."
In a filing posted to the AIM stock exchange Maintel said that for the 12 months ending May 2017 Intrinsic reported an adjusted loss before tax of around £550,000.
In its most recent filing on Companies House, Intrinsic reported revenue of £48m for the extended 18 month period ending 31 May 2016, but Buxton said that the business is not currently trading at this level.
"When you do an acquisition like this a lot of people set their expectations too high and actually let themselves down," he said. "We've been very conservative in terms of what we're expecting from that business when we work out the value, so it certainly won't be £30m [annual revenue]."
Intrinsic's Merseyside office is set to remain open for the foreseeable future, Buxton said, while its London staff will be moved into Maintel's nearby Blackfriars office. The Intrinsic name, meanwhile, is set to be retired at the beginning of Maintel's financial year on 1 January 2018.
Intrinsic has undergone as series of management changes since it was the subject of a management buyout in 2011.
Buxton said the acquisition will provide stability to the company.
"We've done our early calls with [the Intrinsic employees] and obviously it has to sink in, but I think from where they've been over the last couple of years being part of a financially stable group will definitely be a benefit to them."
Buxton said that, from a technology point of view, the main draw for Maintel was Intrinsic's Cisco Gold status.
"Being a Cisco Gold partner opens up a whole new vendor that we've not had in our portfolio," he said. "Any Cisco activity tends to be backed off at a much-reduced margin, so we see that as being a really good area of growth.
"We're very strong on public sector frameworks and any framework where there is a big Cisco play we don't even look at, so we think it's a great opportunity in terms of new business."
Buxton said to expect M&A activity from Maintel in the future but that there is nothing in the pipeline at the moment, as the focus shifts to integrating the Intrinsic business.
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