Yorkshire firm Backup Technology is acquired in £23m deal
YORKSHIRE-BASED company Backup Technology has been sold by its founder Simon Chappell for £23m to quoted cloud computing company iomart Group.
The deal for Leeds-based Backup Technology, which provides cloud backup and disaster recovery services to 200 customers including Siemens, Pernod Ricard and Liverpool and Everton football clubs, is the is biggest acquisition so far for Glasgow group iomart.
Backup Technology, which was founded in 2005 by CEO Simon Chappell and sales and service director Ritchie Fiddes, had turnover of £5.2m last year and employs 16 people.
Mr Chappell, a former executive with Yorkshire investment business Gartland Whalley Barker and a judge in this year’s TheBusinessDesk.com Yorkshire Business Masters awards, is leaving Backup Technology to pursue other opportunities while Mr Fiddes will remain with the business.
The total consideration paid for Backup Technology Limited (BTL) is £23m, through an initial consideration of £17.5m in cash and £3.5m from the issue of 1,205,857 new ordinary shares. A further deferred consideration of £2m is payable in cash on January 31, next year.
Andrew Black, partner at law firm Pinsent Masons in Leeds, led a team that advised BTL on the deal which included Matthew Clayton-Stead, Tom Ralph and Andrew McCarthy.
Simon Chappell said: “This is a really exciting moment for BTL. We very much admire what Angus and his team have done in establishing iomart as the leading player in the market for cloud services in the UK and can see that our backup expertise and services are a great fit. iomart will be a great home for BTL.”
Angus MacSween, CEO of iomart Group, said: “We are delighted to welcome BTL to the group as they have achieved ground breaking progress in the delivery of cloud backup and disaster recovery and have been on our radar for some time. BTL gives iomart a solid and well-established platform to grow further from, with a very good enterprise customer base and little crossover from the existing group base. It’s a very good strategic fit, complementing our portfolio of existing products.”
Ritchie Fiddes, co-founder of BTL who continues as sales & service director, added: “As the growth of cloud services continues to gain momentum, iomart Group provides a perfect fit for BTL to be able to offer its customers additional complimentary services. Being able to plug directly into iomart’s expertise and its enterprise level data centres and fibre network means we can work with even bigger customers who require the big infrastructure and strong balance sheet that iomart can provide.”
BTL is iomart’s second acquisition this year, at the start of September it bought server and managed services provider Redstation in a deal worth up to £8.1m. Listed on the Aim market, the group offers hosting services ranging from single servers to private cloud networks and owns 10 data centres in the UK all connected by its own fibre network.
It has a series of subsidiaries, iomart Hosting, RapidSwitch, Melbourne Server Hosting, Easyspace and iomartcloud and had pre-tax profits for £10.1m on turnover of £43.1m in the year to March 31.
The cash consideration for BTL was financed by a £35m debt package from Bank of Scotland made up of a £15m term loan and £20m revolving credit facility.
Angus MacSween, added: “The two recent acquisitions will continue to drive the expansion of the customer base and our revenue and profit prospects.”
