Annodata targets two more acquisitions in next 12 months

Following Keltec buy, the firm hopes for more deals in the next year

Annodata has revealed it is hoping to bag two more "strategic acquisitions" in the next 12 months, following its announcement yesterday of the acquisition of IT infrastructure provider Keltec.

According to Annodata managing director Andrew Harman, further acquisitions are key to his plan to increase annual revenue from £78m to over £100m by June 2016.

"We have made the acquisition [of Keltec] for strategic purposes to give us a bigger leverage in the IT space, with our clients and potential new clients, so we can sell the complete package around the network. We are looking for other strategic acquisitions and in the next 12 months we are hoping for two more," Harman said.

Annodata was originally founded as an office equipment dealer 26 years ago, but has since evolved into other areas including telecoms, mobile and IT.

Harman stressed these new acquisitions would have to be the right fit for Annodata, and suggested they would likely be in the IT services sector.

"What we won't be doing is bolting on office equipment companies for the sake of it. We need to find the right company which complements Annodata - that means more software, more IT services and possibly with a skill set in the cloud," Harman said.

Harman said potential acquisitions would be funded by a balance of cash –commenting Annodata is "a reasonably positive cash company" – but added the firm has "good relations with the banks if required".

"We have the right financial structure in place to make another sizable acquisition of a similar scale to Keltec," Harman said.

The acquisition of Keltec was funded entirely by Annodata's existing cash revenues according to Harman.

With the acquisition, no Keltec staff will lose their jobs, Harman said, but the move will see Annodata's office in Reading merge with the Keltec office in Bracknell.

Harman said that initially Keltec will keep its name but it will transfer its brand into Annodata eventually.

When asked about Keltec's current profitability, Harman admitted "its net profit was quite low", and "ultimately it needs some investment to bring in more opportunity".

"I would like to think it would grow by 10 per cent on turnover within a year," Harman said. "So if it is a £15m company today, it will be 10 per cent on that in a year's time."