Selection Services to hit £30m mark with 8el acquisition

Kent VAR to take telecoms and connectivity provision in-house with private equity-backed buyout

VAR Selection Services is set to burst through the £30m barrier with the acquisition of telecoms provider 8el.

The deal, for an undisclosed sum, was backed by stakeholders Beechbrook Capital, Barclays Bank and lead investor Palatine Private Equity, which was behind Selection Services' management buyout just over a year ago.

Founded around the turn of the century and based in Reading, 8el provides mid-market customers with telephony, connectivity and network hardware. In its most recently available annual accounts, for the 2011 fiscal year, the firm banked operating profit of about £200,000 on sales just shy of £7.5m.

In its FY11, Bromley-based Selection Services saw revenue remain more or less flat at £23.6m, while operating profit more than trebled to upwards of £1.6m. The company celebrated its 20th birthday last year, has 350 staff serving more than 500 customers and core partners include Microsoft, HP, Cisco, Dell, NetApp and Novell.

Following the buyout, 8el founder Justin Hamilton-Martin will join the operating board of directors of his firm's new owner in a role as head of the Selection Networks unit. Selection Services managing director Grahame Harrington claimed the deal will boost his firm's standing in the managed services arena.

"8el is an established business with an excellent reputation for innovative solution design and service standards," he said. "The acquisition is further evidence of our desire to grow and develop our organisation. 8el immediately establishes our Selection Networks service line as a major contributor to our service portfolio and client solutions."

Barclays provided the VAR with a £1.5m loan to help finance the acquisition and future growth plans.

Piers Deppe, relationship director at Barclays Technology Media and Telecoms team, said: "Selection Services is an impressive, fast-growing business whom we have worked with for 20 years. They are continually looking for new ways to add value to their clients and the acquisition of 8el will enable them to offer a comprehensive end-to-end solution."