Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
The M&A market may have seen the brakes applied as a result of the coronavirus pandemic, but that doesn't mean we've seen no sizable deals.
Market consolidation looked to be continuing its relentless pace in the opening weeks of the year, but lockdowns across the world culminated in 10-year low for M&A activity in June.
That being said, we've still seen deals completed - at times using collaboration software.
We've picked out 10 of the biggest acquisitions announced in H1, taking into account deal size (where disclosed), additional revenue, the size of the companies involved and relevance to the UK IT reseller channel.
Midwich acquires Starin Marketing
Midwich announced its entrance into the US market in February with the acquisition of $200m-revenue audio-visual distie Starin Marketing.
The $46m deal gave the UK distributor a foothold in the "world's largest AV market", it said.
Indiana-based Starin was founded in 1988 and reported unaudited revenue of $222.7m for the year ending 31 December 2019.
The $46m deal consists of a $27.1m cash consideration and an assumption of up to $19m in existing debt facilities.
"The acquisition of Starin Marketing is a significant day in Midwich group's history, marking our entry into North America, the largest AV market in the world," said Stephen Fenby, MD of Midwich group.
"Starin's exposure to, and relationships in, the growing unified communications segment will be greatly beneficial to Midwich as it seeks to increase revenues in this fast-growing AV sub sector across its global network. The highly experienced management team has built a great business and I look forward to welcoming them and the wider team into the Midwich group."
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
Gamma enhances Teams capability
Voice player Gamma boosted its Microsoft Teams capability with the acquisition of Scottish specialist Exactive in a deal worth up to £7.5m.
Dunfermline-based Exactive was established in 2015 and had a turnover of £3.8m for the year ending 31 December 2019.
The deal was made up of £4.5m cash and up to £3m in a "deferred contingent consideration".
Gamma said the acquisition was "another key stage" in its quest to become the leading UCaaS provider in Europe.
It acquired Dutch US specialist Dean One for £23.5m in 2018.
"We have known the Exactive team for many years and see the business as a very good fit," Gamma CEO Andrew Taylor said.
"We are really looking forward to working alongside the Exactive team as we continue to grow Gamma, leveraging our experience and resources, to capitalise on the opportunities ahead."
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
Academia adds ‘string to bow'
Academia boosted its presence in the schools market with the acquisition Apple reseller Toucan Computing last month.
The Enfield-based firm is already an education specialist but has typical focused on the higher education market.
CEO Mike Bacon said Toucan's revenue is around £5m, adding that the firm's 14 employees will remain with the wider business.
"Higher and further education is probably 70 per cent of our revenue, so the schools piece was the missing part of our solution and that is what Toucan does," he added.
Bacon said the Toucan brand will be retained, but the business will be merged into Academia.
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
IT Lab continues clockwork M&A activity
Microsoft partner IT Lab made its fourth acquisition in four years in March, snapping up public sector cloud specialist Sol-Tec.
Sol-Tec reported sales of £9.2m for the year ending 30 June 2019 and counts the Department for Work and Pensions, HMRC and the Department of Education among its customers.
IT Lab CEO Peter Sweetbaum (pictured) said: "Sol-Tec is a true Azure expert, with market leading expertise in the design, deployment and configuration of secure and compliant Azure environments."
Sweetbaum added that the addition of Sol-Tec takes total revenue up to £85m.
The deal marked the firm's fourth acquisition in as many years, having snapped up Perspective Risk in 2017, Content and Code in 2018 and Mirus in 2019.
IT Lab has since announced a rebrand of the group to Content+Cloud.
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
Irish giants consolidate
Arkphire's acquisition of fellow Irish firm Trilogy was actually announced just before the Christmas break last December (and after our last round-up of top channel acquisitions), but completed in February this year.
The merger created a €150m-revenue firm which the pair claimed created the "largest and fastest-growing Irish-headquartered IT procurement and IT managed services business".
Founded in 2009, managed services provider Trilogy expanded into the UK in 2014 by acquiring storage VAR B2lateral.
Meanwhile Dell EMC Titanium and HP Gold partner Akrphire also boasts a presence in London, as well as Sao Paulo, Singapore, Tel Aviv and Tokyo. It specialises in product procurement and IT services.
Arkphire CEO Paschal Naylor said: "This development is a positive step for both Arkphire and Trilogy Technologies, which together have a shared ambition to continue to scale both in Ireland and internationally and to respond to the needs of the market with a stronger, more comprehensive IT services offering from our combined resources."
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
Exponential-e bolsters Microsoft capabilities
Connectivity provider Exponential-e bolstered its IT credentials through the acquisition of Vysiion.
The pair had collaborated on projects in the past, Exponential-e CEO Lee Wade said, adding that Vysiion will continue to trade under its own name.
The acquired firm reported sales of £19m for the 12-month period ending 30 June 2019, up 48.4 per cent on the previous year.
Operating profit swung from a £454,545 loss to £578,786.
It counts Microsoft, Cisco and Dell among its vendor partners.
Exponential-e CEO Lee Wade said: "This is an exciting opportunity for Exponential-e. Vysiion is a high-quality company that has been built by the dedication and commitment of its staff over many years.
"Our culture, values and ethos are an exact match. And the dedication of our respective staff members in delivering true customer service excellence to our clients is a mirror image."
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
Acquisitive MSP acquired
Housing specialist Castleton was snapped up by US-based MRI Software in April for a fee of £82.8m.
Castleton was publicly listed on the AIM market at the time and operates in the UK, Ireland and Australia.
MRI CEO Patrick Ghilani said the acquisition gives the buyer "critical scale" in the UK real estate market and provides a platform for further growth.
"A combined MRI and Castleton will be extremely well equipped to address the varying needs and evolving business models of the UK and Australian social housing sectors, with a comprehensive and flexible product portfolio," he said.
Castleton reported revenue of £23.3m for its year ending 31 March 2019.
It had been an M&A spree itself over recent years, acquiring Deeplake Digital and Indian IT consultancy CarbonNV InfoLogic last year.
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
Computacenter bolsters French business
Computacenter announced plans to acquire the £100m-revenue domestic business of BT France, in a move which CEO Mike Norris said brought the channel giant's French capabilities more in line with its other European markets.
Norris said that coronavirus panel has showed "the importance of secure and reliable networks to our customers and this deal would significantly strengthen our existing French business in this growth area".
BT France logged revenues of €118m (£104m) in its fiscal year, ending March 2019.
Meanwhile, Computacenter's revenues in France totalled €644.7m in its FY2019.
At the time Computacenter said the deal is likely to be completed in the second half of this year, subject regulatory approval.
BT also flogged its Spanish business at the end of last year as part of plans to reshape the business.
"With this agreement we are close to reaching another milestone in the execution of our strategy to make BT Global a more agile business focused on the growing requirements of our multinational customers," CEO of Global BT, Bas Burger, said.
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
AVMI goes Dutch
Acquisitive Dutch collaboration provider said that its acquisition of huge UK specialist AVMI is just the beginning of an M&A spree which will make it the largest player in Europe.
Kinly was founded in 2018 by the merger of Viju and VisionsConnected and has strong private equity backing.
The deal for £80m-revenue AVMI saw it take a chunk out of the UK and sets the firm up for further international expansion, CEO Robbert Bakker told CRN.
"If you look at our positioning in the world, until last week we were the European leader with a presence in Norway, the Netherlands, the US and Singapore," he said at the time.
"By adding AVMI to the portfolio we now have a presence in Ireland, Dubai, India and Hong Kong, so we've increased the presence for both Kinly and AVMI customers… so we think it's a perfect match."
AVMI reported sales of £81.2m in its latest year, making it the UK's largest pure-play AV integrator.
Ten of the biggest acquisitions from the first half of the year
The pandemic may have slowed M&A activity, but there were still some big deals announced in H1
Print vendors continue acquiring partners
Vendor-led consolidation in the print market continued in H1, with Xerox acquiring £70m-sales reseller Altodigital.
Altodigital had been the largest independent print player in the UK after HP acquired Apogee.
Other notable examples include Kyocera's acquisition of Annodata.
Altodigital CEO James Abrahart said: "Altodigital is joining Xerox on its incredible journey as it undergoes a digital-first transformation and invests in customer-focused innovation.
"We share Xerox's vision to broaden the range of services and technologies available to SMBs requiring a modern work experience."
At the same time, Xerox announced it has also acquired Bristol-based ITEC Connect, which counts Xerox, HP and Dell among its vendor partners. It saw turnover hit £39.7m for its year ending 28 February 2019.
Xerox had been edging towards an even bigger acquisition in the form of HP, but pulled the plug on its hostile takeover at the start of the coronavirus saga.