Mergers and Acquisitions, Mergers and Acquisitions, Content

Telefónica Tech Acquires Microsoft Dynamics Partner Incremental

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Telefónica Tech has acquired Incremental, a Microsoft Dynamics cloud partner that has reach into the United Kingdom and Ireland. The deal is worth up to £175 million (around €209 million or US$230 million) based on various earn-out incentives, the buyer said.

This is technology M&A deal number 292 that ChannelE2E has covered so far in 2022. See more than 1,000 technology M&A deals involving MSPs, MSSPs & IT service providers listed here.

Telefónica Tech Acquires Incremental

With this new acquisition, Telefónica Tech becomes one of Microsoft’s largest partners in the UK, with 16 Gold Competencies and five advanced specializations, the buyer asserted.

The addition of Incremental’s business applications, power apps, data analytics and management capabilities to Telefónica Tech UK&I’s cloud services portfolio will expand the combined company's cloud offering for mid-market, large enterprise and government customers, the buyer added.

Launched in 2016, Incremental Group is a Microsoft Dynamics Partner in the UK and is also a player in the data and analytics market. Incremental is headquartered in Glasgow, Scotland, UK, and has offices throughout the UK, Bulgaria and India. Incremental has more than 350 employees -- which brings Telefónica Tech UK&I’s total headcount to around 1,000 employees, the buyer said.

Incremental has been a Microsoft Business Applications Inner Circle member for the past three years and is one of only two partners in EMEA on Microsoft’s Global Advisory Board for data analytics, according to Incremental.

Incremental Group has experienced significant growth recently. In early 2021, Incremental acquired Redspire to expand its capabilities in the financial services market and become one of the largest Microsoft Dynamics partners in the UK. In October 2021, it acquired data analytics company Adatis, enabling the group to deliver end-to-end digital transformation to customers.

Executive Commentary

José Cerdán, CEO, Telefónica Tech
José Cerdán, CEO, Telefónica Tech

José Cerdán, CEO of Telefónica Tech, commented on the news:

“We warmly welcome Incremental Group, and are delighted that this acquisition enables us to strengthen our position as a leader in the UK market for IT services. We are now able to provide end-to-end Microsoft services, including digital transformation, managed services and data analytics, and achieve attractive cross-selling synergies with Telefónica Tech UK&I, complementing and positioning us as a leading Microsoft-focused company in the UK.”

Neil Logan, current CEO at Incremental Group, added:

“I am immensely proud of what Incremental has achieved since our inception a little over five years ago.  As we looked ahead to the next stage of our development, it was important that we secured Incremental the right support for the long term. Becoming part of Telefonica Tech propels us into the next phase of our journey and enables us to further scale the business, creating exciting opportunities for our people and our customers.”

Telefónica Tech's Growth Strategy

This new acquisition by Telefónica Tech adds to the company's growth over the past year, even after the company laid off some 2,700 workers in December 2021, as ChannelE2E reported.

Other acquisitions included the integration of acens, the purchase of Altostratus, the acquisition of Cancom UK&I, now Telefónica Tech UK&I and the incorporation of Geprom, the company said.