AIM-listed iomart Group is acquiring Concepta Capital, a holding company of a group of firms that includes the ORIIUM and Pavilion IT service brands.
It is paying an initial £10.5m in cash to complete the deal. ORIIUM is a channel only IT service provider specialising in data management solutions, and Pavilion IT is a provider of cloud and hybrid infrastructure solutions and support services.
Concepta had revenues of around £10m and EBITDA (pre-exceptional items) of about £1.6m for the year ended 31 March, 2022.
The deal offers iomart new complementary solution capabilities and technical expertise and a “significant” new channel partner network, “strengthening” its indirect route to market, iomart said.
ORIIUM, established in 2007, works with value added resellers and managed service providers to deliver data and application management solutions to end users. Its 45 technical engineers will be joining iomart.
Concepta acquired Pavilion IT, a business established for over 30 years, in 2018, and in 2021 it acquired P2 Technologies, a firm focussed on the legal and accounting professional services sector, to add vertical specialisation.
This created a direct sales organisation with over 250 customers under one unified operational delivery team, offering a range of hybrid and cloud infrastructure technology solutions, plus professional services and on-going customer support arrangements.
“This customer base will now have access to iomart’s hybrid cloud solutions and services,” said iomart.
Completion of the acquisition is subject to approval from the UK Department for Business, Energy & Industrial Strategy, in accordance with the National Security and Investment Act 2021. This clearance is required as ORIIUM provides data management services to UK government bodies.
Chris Kiaie, who established the ORIIUM business and formed the Concepta Group, will continue to lead the ORIIUM and Pavilion IT businesses as CEO.
The maximum consideration payable for Concepta is £14.5m, following the initial £10.5m. In addition, a deferred contingent cash consideration of up to £4m will be payable, dependant on the future profit performance of the Concepta business in the year ending 30 June, 2023.
Concepta currently has bank debt of £1.5m which will be taken on by iomart and settled as part of the completion process. The total potential price tag therefore is £16m.
Reece Donovan, CEO of iomart Group, said: “We welcome the Concepta team to iomart, marking the resumption of our M&A activity in line with our strategic plans. This is a meaningful step as we position the group for its next phase of growth as a leading secure hybrid cloud business.”
