Logicalis plots City and ITSM glory after 2e2 buys

UK boosted by arrival of 10-strong City sales team headed by ex-2e2 sales director Matt Franklin while Dutch arm to become "a centre of excellence" for ITSM

The senior management of Logicalis have spilled the beans on how its deals to take hundreds of staff and contracts from fallen 2e2 will help it realise its growth ambitions in the UK and further afield.

It was announced yesterday that the integrator has paid administrators €24m (£20.7m) for operations in Spain, Ireland, the Netherlands and the Channel Islands. Logicalis group chief executive Ian Cook told CRN that the deals will help towards the company's long-held ambition to "increase our footprint in Mexico, south east Asia and mainland Europe". The quartet of acquisitions will add about $150m (£98.9m) in annual revenue.

"With the Spain and Ireland [businesses], we looked at these a couple of years ago when 2e2 were hawking them round the marketplace," he added. "There was a difference of opinion between the sellers and ourselves, but it was nothing to do with the quality of the business. So we knew them reasonably well when we came to look at them again. The management has not changed, nor will it.

"What we intend to do with [these businesses] is to add what Logicalis does in other parts of the world, particularly in Spain with [what we already do for] our Latin American customers. There are some good opportunities there. One of the things we can do very quickly is extend our services platform to those countries. With our international services platform, whatever services you can deliver in Brazil you can deliver in Dublin."

Around 500 staff will come on board following the buyouts and Cook said there was no plan to make any redundancies. The Spanish and Irish businesses - which still trade as Morse - will be rebranded to Logicalis "at a time to be determined". The name above the door of the Dutch and Channel Islands operations will be brought in line with the new owners as quickly as possible.

Cook claimed that the €24m price tag represented "good value both for the administrators and [in terms of] the worth of the business". He added that he hopes to grow existing EBITDA of $8m (£5.3m) and also improve profit margin.

The Netherlands business is predominantly an ITSM consultancy and Cook claimed the business would eventually become a "centre of excellence" for both its internal processes and its ITSM operations in other parts of the world.

"Ultimately, yes [we will roll out these services in other parts of the world], but we do not want to jump the gun," said Cook. "We can use the UK and our German operations to extend their reach into Europe using the same Netherlands team. It would be impractical to fly those people to Brazil constantly."

UK round-up
In a separate announcement, Logicalis revealed yesterday it has taken on about 70 of 2e2's UK staff, the majority of which relate to one managed services contract. The integrator was unable to say who the customer is, but widespread industry chatter has picked out Marks & Spencer as the company in question.

UK managing director Mark Starkey (pictured) - who officially took over from outgoing chief Tom Kelly on Friday - claimed that the deal would be worth about £10m to Logicalis over its lifespan.

"In terms of professional services, annuity-based contracts and quality of earnings in the UK, this [deal] really helps us," he added. "We have made [the transition] as smooth and easy as we could have done. The back office had to be moved around and there was a lot of paperwork involved, but we focused on keeping everything the same for the customer."

Also joining Logicalis is a 10-strong team headed by former 2e2 sales director Matt Franklin, which has been brought in to focus on sales into the City and other commercial markets. Starkey claimed that Logicalis' key vendors' - particularly Cisco - are eager to do more business in the financial services space through the integrator.

"We knew Matt as the ex-MD of Prime [which was bought by 2e2 in 2004], who we had a lot of respect for as a business. We were the right fit for him in terms of how we do business and our philosophy," he added.