Iomart Group has acquired Concepta Capital and the associated ORIIUM and Pavilion IT businesses. The MSP-centric deal is valued at roughly 6.25X to 9.1X annual EBITDA, depending on whether Concepta and its associated businesses hit earn-out targets, ChannelE2E has calculated. The acquired companies offer data management, cloud and hybrid infrastructure solutions along with associated MSP services.
This is technology M&A deal number 742 that ChannelE2E has covered so far in 2022. See more than 2,000 technology M&A deals involving MSPs, MSSPs & IT service providers listed here.
MSP M&A: Deal Valuation, EBITDA Multiple and Financial Math
Here's the math behind the deal:
- The initial purchase price is £10.5 million (US$12.42 million), though certain earn-out targets could lift the overall price to £14.5 million (US $17.15 million).
- Concepta had revenues of £10 million (US$11.82 million) and EBITDA (pre-exceptional items) of £1.6 million ($US 1.89 million) for the year ended 31 March 2022.
- The deal is therefore valued at roughly 6.25X to 9.1X annual EBITDA, depending on whether Concepta and its associated businesses hit earn-out targets.
ORIIUM, launched in 2007, is based in Leeds, England. The channel-only organization that supports VARs and MSP partners in the United Kingdom. ORIIUM helps customers manage risk by delivering fully managed application control, data protection, information governance and rapid recovery solutions, the company indicates. Roughly 45 ORIIUM technical engineers will join Iomart.
Concepta acquired Pavilion IT in 2018 and P2 Technologies -- a legal and accounting IT consulting -- in 2021. P2 tucked into Pavilion IT as part of the deal. Pavilion IT is based in Sheffield, West Yorkshire. Key services into MSP, consulting, managed security, cloud, telecoms and business continuity capabilities.
Fast forward to present day: The Concepta businesses include ORIIUM and Pavilion IT, which CEO Chris Kiaie will continue to lead.
Iomart Acquires Channel Partner and MSP Businesses: Executive Perspectives
In a prepared statement about the deal, Iomart CEO Reece Donovan said:
“We are delighted to welcome the Concepta team to iomart, marking the resumption of our M&A activity in line with our strategic plans. 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. This is a meaningful step as we position the Group for its next phase of growth as a leading secure hybrid cloud business.”
Added Chris Kiaie, CEO of Concepta:
“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.
“Identifying a business that shares our culture, goals and aspirations was incredibly important, and iomart’s commitment to exceptional customer service, team wellbeing and personal development represents our values perfectly. The team and I are all incredibly excited to be working as part of the wider group and look forward to being part of iomart’s incredible ongoing success.”
The deal -- subject to written confirmation from the UK's Department for Business, Energy & Industrial Strategy -- is expected to be approved soon. The clearance is required as ORIIUM provides data management services to UK government bodies.
