Cancom sells off UK and Ireland business to Spanish firm for almost €400m

Microsoft Gold partner says the sale to Telefonica Tech follows a 'strategic review' at the company

Cancom has sold off its UK and Ireland business to Madrid-based technology services company Telefonica Tech for a sum of €398m (£338.74m).

The valuation represents 15.8 times Cancom UK&I's EBITDA for its full-year 2020, Telefonica Tech claims.

The German-based reseller says the decision to divest its UK&I business "follows a strategic review" and will see the company achieve a "book gain of around €225m".

MSP Telefonica Tech offers a range of services from cybersecurity offerings like managed detection and response to AI and cloud services. It says the acquisition bolsters its positioning in one of the group's four key markets.

"Having the Cancom UK&I talented team join Telefonica Tech will strengthen our cloud and cybersecurity capabilities in the UK and Ireland, with a strong focus on professional and managed services, and combined with our value proposition and global reach allows us to position ourselves as the strategic partner for our B2B customers in their digital transformation strategy," José Cerdán, CEO of Telefónica Tech, said.

"I am really delighted that Cancom UK&I are becoming part of the Telefónica Tech family. This is a fantastic next step in our company's growth."

In a post on LinkedIn, Cancom UK&I CEO Martin Hess said he and his management team would be leading the company following the acquisition, posting: "On behalf of my management team, we have enjoyed being part of the Cancom family for the past three years and in going our separate ways we wish all of our colleagues in CANCOM our best wishes for the future."

Last year saw the firm's former CEO Thomas Volk resign over what the company called "differing opinions on the future strategic development" of the business which saw its share price fall by almost ten per cent shortly after.

Telefonica Tech says that Cancom UK&I will reach €190m of revenue in 2021 and that its almost 600 employees will join the company.

Cancom greatly increased its presence in the UK and Ireland through its acquisitions of Novosco for £70m in 2019 and OCSL in 2018.

The Munich-based reseller says that it will recieve cash proceeds of around €390m in its financial year 2021 through the acquisiton, which it says will go towards investing in M&A opportunities in the DACH region.

As well as Spain, Telefonica also operates in Germany and Brazil and claims its revenues have grown by more than 25 per cent in the first half of 2021.