Cloud computing business seals acquisition deal worth up to £14.5m

Cloud computing company, iomart Group, has agreed to acquire Concepta Capital, a holding company of a group of businesses which includes the ORIIUM and Pavilion IT brands, for an initial cash consideration of £10.5m.

ORIIUM is a Leeds-based channel only IT service provider specialising in data management solutions. Pavilion IT is a Sheffield-based provider of cloud and hybrid infrastructure solutions and support services.

ORIIUM works with value added resellers and managed service providers to deliver data and application management solutions to end users.

iomart says acquiring ORIIUM means it gains an independent wholesale operation that understands the UK IT channel deeply and has built trust through long-standing strategic partner relationships.

It adds ORIIUM will materially strengthen its indirect sales channel capabilities, while extending the Group’s product and technical skills and capabilities, with an additional 45 technical engineers joining the Group.

Concepta acquired Pavilion IT in 2018 and in 2021 acquired P2 Technologies, a business focused on the legal and accounting professional services sector to add vertical specialisation.

It created a direct sales organisation with over 250 customers under one unified operational delivery team. This customer base will have access to iomart’s hybrid cloud solutions and services.

Concepta had revenues of about £10m and EBITDA (pre-exceptional items) of around £1.6m for the year ended 31 March 2022.

Chris Kiaie who established ORIIUM business and formed the Concepta Group will continue to lead the ORIIUM and Pavilion IT businesses as their CEO, supported by his team.

iomart will pay an initial cash consideration on completion of £10.5m, subject to potential completion accounts adjustments.

In addition, a deferred contingent cash consideration of up to £4m will be payable dependent 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 vendors of Concepta are the existing management team, with Kiaie having a majority stake.

Reece Donovan, CEO of iomart Group, said: “After careful assessment of the market, in Concepta we found a business and team that fits within our strategic growth plan by, extending the Group’s product, skills and capabilities, strengthening our direct and indirect routes to market, and complementing the Group’s strong financial model.

“ORIIUM has a long track record and strong reputation across the indirect channel which allows us to broaden our reach whilst enhancing our expertise within the data management service layer.

“Pavilion IT provides a new and diverse customer base adding scale, technology and geographical coverage to our existing infrastructure reselling and support activities.”

Chris Kiaie, CEO of Concepta, added: “Joining iomart marks the beginning of the next phase of growth for Concepta, and is a very exciting time for our highly skilled, experienced and ambitious team.

“It allows us to leverage joint capabilities, capitalise on our understanding of the markets we operate in and build upon the significant achievements to date.”

The shareholders of Concepta were advised by Leeds-based teams from Dow Schofield Watts (Corporate Finance) and Brabners (Legal).