Scalable and Alternative in Mitel marriage

Two of comms vendor's top UK partners join forces as Alternative Networks agrees £10m buyout of rival

Telecoms reseller Alternative Networks has splashed the cash on fellow top-level Mitel partner Scalable Communications.

Publicly listed Alternative announced to the markets this morning that it has paid an initial £7.5m in cash to acquire Buckinghamshire-based Scalable. An extra £2.5m deferred consideration will be paid should 2011 growth targets be met.

Alternative, which grew sales three per cent to £47.1m in the six months to the end of March, indicated that it has had its eye on a buyout of its rival for several years. It claimed the two firms sell into complementary customers in similar verticals.

Additionally, the only product overlap between the two firms' portfolios is Mitel. Scalable also works with vendors including Juniper and Extreme, while Alternative boasts Alcatel-Lucent, Avaya, Cisco and Panasonic partnerships.

Alternative Networks chief executive James Murray claimed the buyout would boost his company's managed services provision credentials.

"It has always been our strategy to build an integrated platform of managed data services. We have been following Scalable for some time and recognised the value it can deliver to our business and the scope it offers to achieve this objective," he said.

"We are therefore delighted to have completed this acquisition, which makes strong financial and commercial sense. It is our second acquisition in less than a year and represents a key milestone in our efforts to secure a leading position in the provision of converged networking services.

"We will now be even better placed, not only to cross-sell these services across a growing customer base, but also to make further complementary ac quisitions and continue to deliver long-term shareholder value."