Telefónica Tech acquired Cancom Ltd., a subsidiary of digital transformation company CANCOM SE, for €398m.
The transaction values Cancom Ltd. at an Enterprise Value of €398m, which corresponds to a transaction multiple of 15.8x (Enterprise Value/EBITDA 2020A). The deal, at a multiple of 13.5x EV/OIBDA (based on 2021E), will strengthen the capabilities of Telefónica Tech’s cloud and cybersecurity division in the UK and Ireland. As a result, Cancom is divesting its entire business activities in the United Kingdom and Ireland.
Cancom UK&I has 600 professionals, who will be joining the Telefónica Tech team, and a broad and strong digital services portfolio, including professional services and managed services in advanced IT, cybersecurity and multi-cloud solutions. It will realise a book gain of around €225m through the deal, which will be included in Cancom Group’s net profit for 2021. Upon completion of the transaction, Cancom SE will receive cash proceeds of around €390m. The transaction is expected to be completed within the third quarter of this year. Cancom intends to reinvest the proceeds in the acquisition of companies in its core regions: Germany, Austria and Switzerland.
Cancom UK&I is a certified Microsoft Gold Partner for 9 competencies, including Azure Expert MSP, CSP Direct, LSP, Surface Silver Partner and FastTrack, and it also has other relevant partnerships with leading technology vendors. The company reached €155m in revenues in 2020. CANCOM UK&I will reach €190m of revenues in 2021 with an adjusted EBITDA margin of 15.4% and revenues related to managed services and professional services revenues project differential growth rates of 20% and 26% CAGR18-21 respectively.
Founded in 1990 as Organized Computer Systems Ltd, or OCSL, the company started as a consultative resell business focused on hardware, client server and virtualisation. In 2008, it moved into managed services and cloud solutions with the acquisition of SanSource. In 2015, the firm acquired Rockpool IT to expand its consultancy offering by introducing a flexible resourcing service. In August 2018, OCSL became part of the Cancom Group and formed part of the strategic hub for UK. In January 2021, Cancom UK&I was formed after three acquisitions were completed in both the UK and Ireland by the Cancom Group.
The company delivers a range of technology services across the public and private sectors, holding the highest accreditations from technology and software leaders, leveraging UK&IE data centres that hold many certifications, including Government Official Status.
Led by José Cerdán, CEO, Telefónica Tech is a digital transformation company which offers a wide range of services and integrated technological solutions in cybersecurity, cloud, IoT, big data and blockchain.
FinSMEs
29/07/2021