iomart adds colour to cloud offering with Redstation buy

Cloud hosting outfit shells out up to £8m for latest acquisition

Cloud hosting outfit iomart Group has added another brick to its expanding datacentre empire by acquiring rival Redstation for up to £8m.

Redstation provides hosting services to about 3,000 customers from two datacenters in Hampshire and turned over £5.2m in its last financial year.

The deal means iomart now manages around 20,000 servers on behalf of customers from 10 fully owned data centres across the UK.

iomart has stumped up an initial sum of £5.1m in cash and £1.5m in shares to land its man, with a further £1.5m payable if Redstation hits certain profit targets for the period to the end of March 2014.

Angus MacSween, chief executive of iomart Group plc, said: "The addition of Redstation will consolidate our position as the leading player in the dedicated server market in the UK."

Martin Groom, managing director of Redstation, said: "Redstation has grown to the point where we need to move to the next level, so becoming part of the leading cloud company in the UK makes perfect sense. As part of the wider iomart Group we will have access to greater resources and technical innovation and will be able to offer an even wider range of cloud services to our ever-growing customer base."

In its fiscal 2013, iomart posted a pre-tax profit of £10.7m on revenues that rose 29 per cent to £43.1m