2e2 sets £700m revenue goal

Integrator reveals M&A spree may not yet be over

Deals in the pipeline: 2e2 says it will likely have further opportunities to acquire

2e2 has refused to rule out further acquisitions as it strives to become a £600-700m-revenue outfit within three years.

The integrator, which recently bought Morse, has also confirmed it will press on with plans to offshore some support functions, in a move designed to bring it into line with larger rivals as it grows in stature.

2e2 chief executive Terry Burt told CRN: “Through a combination of organic and inorganic growth, we would hope to get to £600-700m within two to three years.

“With the level of M&A activity around it is unlikely we won’t have further opportunities.”

Several of 2e2’s rivals have recently been linked to the M&A rumour mill. Voice and data integrator Redstone today emerged as a possible mover and shaker as it was announced serial entrepreneur Ian Smith is taking the reins of the firm. Calyx has also been touted as a possible target as it works towards cutting its debt.

Burt described Smith as “one of the best acquirers and integrators of mid-market businesses in the channel”, but stressed 2e2 wouldn’t be a bidder for either Redstone or Calyx.

Burt also revealed that 2e2 is close to completing an employee consultation process relating to its plans to hook up with Indian IT services firm Patni.

“We have decided we would like to get some offshoring skills in place, but there have been no firm decisions on people’s positions, which we will communicate in the next month or so. We will look to preserve as many people as we can, while having a more extensive facility offshore, which will give us a better quality of service," he said.

“As we look to players that are larger than us with an offshoring component in their offerings, the argument is really not if, but when.”

Burt admitted some customers may find the move hard to swallow, but said 2e2 would be sensitive to their needs.

“Not every customer will welcome the change, but we haven’t lost one customer in the last two years other than Woolworths, which went into administration” he said. “We prize them very highly and hope to find a formula that can fit every one of them.”