Altron subsidiary Bytes UK has agreed to buy 100% of Blenheim, the holding company of British value-added reseller Phoenix Software, for £35.9 million, or about R650 million.
The deal will be funded through a combination of cash resources in Bytes UK, existing group facilities and a new trade finance facility in Bytes UK.
Phoenix Software, which was established 27 years ago, specialises in end-to-end IT infrastructure solutions, including software asset management, software licensing, licence-management-as-a-service, hardware and devices, managed services, cloud services, data storage, data centre infrastructure management, enterprise software, servers, network security, unified communications, and virtualisation.The business is strong in the public sector, with customers including the UK’s National Health Service, emergency services, housing associations, local authorities, schools, charities and local businesses. It focuses on northern England, whereas Bytes’s existing UK business operates mainly in the south.
For the financial year ended October 31 2016, Blenheim and its subsidiaries reported revenue of £118.8 million, earnings before interest, tax, depreciation and amortisation of £5.1 million, and profit after tax of £3.6 million.
“The acquisition will bolster Bytes UK’s presence in the value-added reseller segment, particularly with respect to adding additional Microsoft capabilities to the group, which will in turn make us a significant UK partner to Microsoft,” said Altron CEO Mteto Nyati.
“The acquisition also increases our international footprint, one of our key drivers for future growth as we seek to position Altron as a global ICT company through acquisitions and partnerships with other businesses in selected foreign markets.”
The combined entity will have revenue of £400 million and about 480 employees.
The deal came about after Phoenix’s owners said they wished to retire. Key employees will enter into two-year service contracts. No job losses are expected.
The transaction will become effective by no later than October 1.
This article was first published on TechCentral. To access the original, please click here.