Telford cloud computing firm seals £13m takeover
Cloud computing specialist Nasstar is to buy out an industry rival in a £13 million deal, which it will fund by selling millions of shares in the business.
The Telford-based company today continued its string of acquisitions with a cash-and-shares move for Bournemouth-headquartered Modrus.
As well as adding more than £6 million worth of annual sales to Nasstar's roster, the move will give the Telford business access to Modrus' offices in London and New Zealand, which provides the company with an out-of-hours service for domestic customers.
Nasstar, based at Datapoint House on Queensway Business Park in Telford, will fund the deal by selling off more than 177 million shares at 7.5p each.
Modrus mainly provides IT services to the recruitment, professional services, media, private education and software sectors.
Chief executive Nigel Redwood said: "It's very exciting.
"Modrus is a great company to add and we are starting to build a really compelling group now, and we are up to almost a £50 million market capitalisation. Any acquisition bears a degree of risk, but the similarities between the businesses mean that is very much minimised.
"We know what we are buying, and it's a business with high revenues and good historic performance."
As well as the deal that saw Nasstar merge with Telford-based e-know to create the current business in 2014, the company has made moves for other industry operators Kamanchi in July 2014, and VESK Group in October last year.
It said the move for Modrus was "in the same vein", adding breadth and scale to the group.
But Mr Redwood added that the marketplace remains fragmented, and that further deals could arrive in the future.
"I still think there's room for consolidation," he said. "We bought VESK last October and now Modrus withini a year of that.
"There's now a bit of a focus from our end to maximise the synergy benefits of these acquisitions, and the for the next 12 months we are focused on getting the maximum out of those two businesses. But there's more opportunities for consolidation and in 12 months' time I would hope we are looking for another."
Nasstar has already identified a number of cost-savings to help make the combined businesses more profitable, including moving Modrus' London operation into Nasstar's existing footprint, which has capacity for the company, and getting rid of Modrus' data centre in favour of Nasstar's own facility.
With Nasstar's headquarters being in Telford, and the cost of hiring in Shropshire being considerably lower than in London, it is likely that the enlarged operation will be centred on Datapoint House.
It will also use the New Zealand office to enlarge the combined businesses' out-of-hours operation, which will free up engineers based in its UK offices in Telford, Northampton, London and Bournemouth to leave behind the need for night shifts.
