Xploite splashes £7m on Itheon

Storage VAR ploughs on with acquisition drive

Storage VAR Xploite has continued its aggressive expansion drive with the acquisition of business services assurance specialist Itheon.

Less than three weeks after launching an offer for IBM partner Red Squared, Xploite is stumping up a maximum £7m in cash for Itheon, whose clients include HSBC, Shell and UBS.

Half of the sum will be paid up front, with up to £3.5m up for grabs in 31 January 2009, based on performance targets. Itheon posted a pre-tax profit of £0.4m on a turnover of £3.2m in 2006.

According to Xploite, Itheon focuses on IT business service and application solutions that monitor, meter and automatically recover critical IT business services for IBM, HP and Hitachi Data Systems customers.

Nearly £1m of its turnover is drawn from recurring maintenance and services.

Ian Smith, chief executive at Xploite, said: “This acquisition is in line with our stated strategy to expand the scale and depth of the group in the managed services and storage sectors of the IT services market. Itheon will further enhance our managed services offering with its recurring revenue and add real IPR to our business.

“Itheon’s software adds considerable value in particular to our storage customer base with the ability to provide utility billing which we believe makes a compelling offering.”

Last week, Xploite announced it had received two further irrevocable undertakings from Red Squared shareholders pledging to vote in favour of its offer, including reseller ANS.

This boosted the percentage of irrevocable undertakings to accept the bid from 53.9 per cent to 64.7 per cent.