The biggest channel acquisitions of 2022 so far
CRN looks at the deals that were struck and how it will benefit the company being acquired
2022 has been another year of hectic M&A activity in the UK channel, with deals ranging from mega-blockbuster ones to smaller bolt-on acquisitions as we pass the halfway point of the year.
These include deals such as Nuvias being acquired by Infingate and FluidOne adding SAS Global Communications to its business.
And private equity deals continue to make their way onto this list after 2021 was dominated by platform acquisitions or bolt on acquisitions from private equity businesses that were looking at the IT services space with interest.
Here are some of the biggest deals to have been announced in 2022 so far:
XLN
Announced: 17 February
Acquired by: Daisy
Revenue of acquired business: £2.4m
Background:
XLN's latest accounts show it turned over £2.4m in the year to 31 March 2021, down from £3m in 2020.
The company said revenue and EBITDA had been negatively affected by the Covid-19 lockdown, but said it is focussed on growing its EBITDA.
It claims to provide more than 100,000 small businesses with business broadband, phones and card payments.
Rationale for acquisition:
Daisy says the deal will boost its own broadband and phone division to more than £200m in revenue.
It added the acquisition will extend its own portfolio and enable it to offer the "widest choice of solutions" to the business market.
What was said:
Daisy chairman Matthew Riley said: "With so much investment across the UK to improve the fibre infrastructure, Daisy is now well-positioned to help unlock the enhanced speed, reliability and security that customers want in their offices and shops up and down the country. There is also a vast opportunity in the creation of jobs as we need more staff to help deliver that service."
Risual
Announced: 6 July
Acquired by: Node4
Revenue of acquired business: £11.5m
Background:
Risual has seen growth in the past couple of years, boosting its revenue from £9.5m in 2020 to £11.5m 2021.
The company said it saw a 21 per cent increase in sales which has driven "significant growth in fee earning headcount".
Based in the UK, the company claims to hold 15 Gold-level Microsoft competencies and nine out of 18 Microsoft Advanced Specialisations.
With 170 staff, risual is one of few Azure Expert MSP in the UK and one of only 79 globally.
Rationale for acquisition:
This marks the second acquisition for Node4 in less than a year, having previously made its largest-ever acquisition in the shape of Microsoft Dynamics 365 partner TNP.
Node4 told CRN that the "pressure" to grow was part of its rationale in acquiring risual.
The Derby-based midmarket MSP claims that the acquisition will add skills, experience and revenue to its managed services business, bolster its focus across Microsoft's three cloud platforms and grow its customer base of public and private sector clients.
It also said it will create a Microsoft Centre of Excellence through the acquisition.
What was said:
Andrew Gilbert, CEO of Node4, told CRN: "As we're growing quite quickly and as we are seeing the size of opportunities develop and the types of organisations we're working with, we're increasingly under pressure to grow our people base, skill set and competencies.
"In this current market it is a very challenging environment - from an employee perspective - to recruit people and also to get like-minded people that fit culturally and also with skill set.
"Organisations like risual are a way of helping us scale the business from a people perspective and from a capability perspective."
Ping
Announced: 22 March
Acquired by: Sword Group
Revenue: £13m (approx.)
Background:
Ping Networks Solutions designs, supplies, implements and provides support and management of networking solutions across a global customer base spanning markets including energy, financial services, education, public sector, manufacturing and construction.
The Cisco gold partner expects a revenue of about £13m for 2022.
Rationale for acquisition:
Sword offers a range of services from digital workplace to managed services and claims the acquisition will add an experienced team of engineers which offer "exceptional levels of skill for client's demands".
What was said:
Dave Bruce, CEO of Sword UK said: "I'm delighted to welcome the Ping team into Sword. This deal will allow us to deliver a more complete range of solutions to our customers.
"The Ping team has an exceptional level of skill and domain experience and is focused on delivering quality solutions - they will be a great fit within Sword. Our shared core values will ensure we continue to provide an exceptional result for our customers and the wider Sword Group."
Incremental
Announced: 22 March
Acquired by: Telefonica Tech
Revenue of acquired business: £16.2m
Background:
Based in Glasgow but with offices in India and Bulgaria, Incremental focuses on the data and analytics market and has been a Microsoft Business Applications Inner Circle member for the past three years.
It generated revenue of £16.2m in the year to 31 March 2021, although a "significant turnaround" in profitability during the period was "testament to the tough decisions" made in 2020.
Following acquisitions of Redspire and Adatis in February and October 2021, the company said it is on track to deliver revenues of £40m in 2022.
Rationale:
Telefónica Tech announced the acquisition of the Glasgow-based Microsoft Dynamics partner for up to £175m.
Telefónica Tech claims the deal will "strengthen its capabilities and presence" both in the UK and Ireland.
With the addition of Incremental, Telefónica Tech now has 16 Gold-level competencies and five advanced-level specialisations with Microsoft, making it one of the vendor's largest partners in the UK.
What was said:
"We warmly welcome Incremental Group and are delighted that this acquisition enables us to strengthen our position as a leader in the UK market for IT services," José Cerdán, CEO of Telefónica Tech, said.
"We are now able to provide end-to-end Microsoft services, including digital transformation, managed services and data analytics, and achieve attractive cross-selling synergies with Telefónica Tech UK&I, complementing and positioning us as a leading Microsoft-focused company in the UK."
SAS Global Communications
Announced: 5 January
Acquired by: FluidOne
Revenue of acquired business: £19m
Background:
Founded in 1989 and based in Horsham, BT Wholesale, TalkTalk Business and Colt partner SAS Global Communications offers managed networking services and bills itself as a SD-WAN specialist for mid-market and enterprise customers.
The business focuses on customers with more than 1,000 staff and currently serves around 150 clients with sites in 65 countries.
SAS Global Communications latest accounts show it turned over £19m in 2020, up from £15.2m in 2019.
Rationale for acquisition:
FluidOne has been on the M&A trail over the last few years and snapped up £6m-revenue MSP PSU Business Technology in November 2020 before acquiring Cyber Security Associates at the start of 2021.
The cloud aggregator struck a deal with SAS Global Communications in a bid to create a £60m-revenue business and add new skills in SD-WAN hybrid networks.
The move also brings headcount to 240 staff serving 1,300 customers and resellers.
What was said:
FluidOne CEO Russell Horton said: ""I have known Colin Mattey, the chairman of SAS, for a number of years and knew of the quality of the business, particularly in multi-national SD-WAN deployments and their unique network monitoring and management portal developed in-house.
"With their strength in serving larger mid-market and enterprise customers and complementary services, the FluidOne board and I saw a great fit to our connected cloud solutions strategy, broadening the offering to our combined customers. In particular, with FluidOne being an SD-WAN partner with Fortinet and VMWare, and SAS having strong SD-WAN experience with Cisco, combined this gives market-leading capabilities and customer choice in SD-WAN and hybrid networks.
"Both businesses have services that will benefit each other's customers, and we have already started working together on joint opportunities. I look forward to working with the management team and staff at SAS, and I am excited at the opportunities that our combined capabilities give to support our ambitious growth plans and to serve our customers."
EACS
Announced: 6 June
Acquired by: Mode Solutions
Revenue of acquired business: £23.1m
Background:
Founded in 1994, Cambridgeshire-based EACS is a managed services provider which turned over £23.1m in its latest financial accounts for the year ending 31 March 2021, down three per cent on the previous year.
The Microsoft Gold partner is an approved supplier on the G-Cloud Digital Marketplace and NHS Shared Business Services and counts The University of Cambridge, Development Bank of Wales and Kwik-Fit among its customers.
Rationale for acquisition:
Mode Solutions has its roots as a print provider, but diversified its business in 2019 through its acquisition of Nix Communications, adding unified comms and networking services to its business.
The acquisition of EACS "strategically expands" its capability into managed services while also expanding its geographic reach and more than doubling its existing revenues.
Following the deal, the East Hertfordshire-based firm now claims to have three sites in the UK, a combined headcount of 200 and a core customer base of nearly 3,000.
What was said:
Mode Solutions CEO Alex Tupman said: "An acquisition of this size and quality further demonstrates our growth ambitions and evolution from our heritage, as well as delivering on our strategic objectives to offer a full trifecta of digital services to UK businesses from a single source with a reputation for providing an outstanding customer experience.
Caretower
Announced: 24 February
Acquired by: Integrity360
Revenue of acquired business: £28m
Background:
Caretower's generated sales of around £28m in 2021, up from the £25m in 2020 - the year saw the company suffer a six per cent calendar revenue dip due to the pandemic.
The cybersecurity MSP offers managed security services, penetration testing, security consultancy and managed incident response services, working with an array of vendors including Microsoft, Sophos, Kaspersky, Check Point, Forcepoint, Barracuda Networks among others.
Rationale for acquisition:
This deal marks Integrity360's first acquisition since it was itself acquired by August Equity in June last year.
The company claims that acquiring Caretower will create a £70m revenue business across the UK and Ireland and boost its headcount to more than 300 employees including 200 cybersecurity engineers, analysts, consultants and specialists.
The cybersecurity outfits share many of the same vendor partners and are "well known for their deep cyber expertise and customer service ethos", Integrity360 claims.
What was said:
Integrity360's executive chairman Ian Brown said: "This is a very exciting transaction for us and we couldn't be more delighted to welcome the team from Caretower to Integrity360… The enhanced group is now clearly positioned as the leading independent cybersecurity services specialist throughout the UK and Ireland.
"Already providing services to over 1500 customers, the combination of Integrity360 and Caretower positions the group well to provide that partnership for both private and public sector organisations."
BCN Group
Announced: 20 June
Acquired by: ECI Partners
Revenue: £40m (approx.)
Background:
With its base in Manchester, BCN operates via a further three offices across the North of England, employing more than 220 staff of which 150 are trained support staff and technical engineers.
BCN claims to have grown its revenue from £10m to £40m over the past four years under Beech Tree.
Rationale:
The Microsoft partner has been sold to former Content+Cloud investor ECI Partners and marks an exit for Beech Tree Private Equity which first invested in BCN in 2018.
It came as its former owner claimed to have made 5.3x on their initial investment in 2018.
ECI Partners says that it intends to "continue this buy-and-build strategy going forwards".
The private equity firm claims to invest in growth businesses valued up to £300m.
What was said:
"BCN Group is a fantastic business that puts the customer at the heart of its organisation. The rising importance of IT, digital transformation, and cloud adoption, combined with BCN's fantastic customer reputation, means that BCN is incredibly well positioned to further expand its capability, geographical presence and customer offering both organically and through M&A," said partner at ECI, Mark Keeley.
"We're delighted to be partnering with Rob and the team for the next stage of their journey."
Nimans
Announced: 8 February
Acquired by: Midwich
Revenue: £114.3m
Background:
Based in Manchester, Nimans distributes telephony hardware as well as solutions such as unified communications, VOIP, security and networking, and partners with a wide range of vendors including BT, Microsoft, NETGEAR and Yealink.
Nimans accounts for the lion's share of revenues in the £130m-revenue Nycomm Group.
The distributor generated consolidated revenues of £114.3m and pre-tax profits of £5.8 million for the year ending 31 December 2020 while currently trading with over 2,500 telephony, IT and retail customers and employing over 200 staff.
Rationale behind acquisition:
Midwich says the acquisition brings further opportunities to the group, in terms of skills in new product and technology areas, service offerings to the trade, a large new customer base and new vendor relationships.
The deal will be funded from Midwich's existing facilities and is expected to be earnings enhancing in the year to 31 December 2022, the audiovisual distributor claims.
The aggregate consideration of £27.5m will be paid in cash with an initial consideration of £16.5m payable upon completion of the acquisition which will be followed by two fixed instalments of £5.5m each after 12 and 24 months respectively.
What was said:
"Midwich continues to grow its UC offering and Nimans brings further opportunities to the group, in terms of skills in new product and technology areas, service offerings to the trade, a large new customer base and new vendor relationships," Stephen Fenby, Midwich Group managing director, said.
"Its traditional telecoms market has experienced significant change in recent years, bringing with it new revenue opportunities which the company has developed strongly, in areas such as unified communications, video conferencing, security and networking.
"I believe that the combined skillsets and capabilities of Midwich and Nimans bring a unique offering into the market with the ability to provide complex solutions involving multiple technologies. I look forward to welcoming the whole Nimans team into the Midwich Group."
Version1
Announced: 21 April
Acquired by: Partners Group
Background:
Headquartered in Dublin, Version 1 works with private and public sector clients on digital transformation programmes.
It employs over 2,100 staff and has offices in Ireland, the UK, India and Spain.
Over the past five years, Version 1's revenues have increased to over €240m and has made a total of 13 acquisitions to date.
Rationale:
Since 2017, Version 1 has been led by chief executive Tom O'Connor, who will now partner with Partners Group to drive Version 1's future growth.
Partners Group says its value creation plan aims to achieve double-digit growth by developing the company's service offering and technical depth, building its international presence, and pursuing accretive M&A.
What was said:
Kim Nguyen, Partners Group partner and co-head private equity services, said: "We have been tracking Version 1 through our thematic focus on digital transformation. Based on our investment and value creation track record related to this theme, we value Version 1's strong leadership team, differentiated offering, and operations which are reflected by excellent customer and employee satisfaction scores, and impressive organic growth.
"The Company is well-positioned to capitalise on the tailwinds driving increased digitisation across both the private and public sector and we have conviction in its growth prospects. We look forward to working with Version 1's ambitious management team on our value creation plan."
Civica's licensing and cloud software lifecycle (LCSL) business
Announced: 15 February
Acquired by: SCC
Background:
Civica provides software applications to public sector services across areas including government and justice, local government, housing, health and care, and education and its LCSL customers including local councils, universities, and housing associations.
Civica's LCSL business contributed to overall software and related services revenue of £346.7m for the year 2020, its financial results show.
Rationale for acquisition:
SCC claims the acquisition of Civica's LCSL team and its existing customer and partner relationships will "increase SCC's presence in the cloud software lifecycle market" and "strengthen its successful software licensing and software asset management (SAM) businesses".
What was said:
"We're excited to welcome Civica's talented team into SCC, and we look forward to meeting customers old and new as this acquisition helps us to drive growth in a key strategic area," James Rigby, SCC chief executive, said.
"The depth of Civica's knowledge, capability and customer relationships presents a wonderful opportunity to complement our existing software business. By joining SCC, Civica's team gain access to a larger market and support team.
"Licensing and cloud software lifecycle services are critical in delivering true business through visibility and control of software assets and cloud deployments.
"We have successfully delivered software asset management for over 20 years, and we have built a reputation for driving some of the biggest and most complex asset programmes. This acquisition will help us deliver the next phase of growth."
Nuvias
Announced: 5 July
Acquired by: Infingate
Revenue of acquired business: £475m
Background:
Nuvias says it provides security, agility and manageability for clients, networks and cloud technology solutions through an ecosystem of "highly skilled" channel partners.
Rigby Group founded Nuvias in 2015 following its acquisition of Wick Hill. It then went on to build a pan-European distributor though acquisitions of networking distributor Zycko later that year, followed by Siphon in 2016 and Belgian distie DCB in 2017.
Including its UC business, Nuvias reported revenues of £560m in its FY22 ending 31 March, 36 per cent higher than the previous year, or 25 per cent higher excluding its UC business.
Rationale:
The deal between Infinigate and Nuvias will form a pan-European player with €1.4bn in revenues.
The acquisition will create a distributor that serves SMB, enterprise and service provider customers, with Nuvias bringing vendor partnerships with the likes of Juniper Networks, Watchguard and Check Point as well as a large base of enterprise and service provider customers.
Infinigate said it aims to continue to grow its revenues by more than 20 per cent each year following the acquisition.
What was said:
Infinigate CEO Klaus Schlichtherle told CRN that the timing was right to create a "real pan-European player".
"Talks have been going on for a while, but they accelerated in the last couple of months," he said.
"We all think it's good timing right now. It's good timing to join forces and to create a real pan-European player focusing on security. There's such a complimentary setup in terms of country and vendor coverage, and it gives us the ability to operate in three main markets - Germany, the UK and France - on a completely different level than before because of Nuvias' strengths in the UK and the combined strengths in France where together we are considerably bigger - and obviously the DACH strengths of Infinigate.
"There's a real natural fit for those two companies. And that's why we said at one point in time, ‘hey, let's get serious now'," he said.