At the end of March, we noted that iomart’s financial year (to 31st March 2011) had been missing one thing – an acquisition (see Iomart puts a great year to bed). Well it might have been a few weeks later than we were expecting, but it has happened. This morning Iomart has announced the acquisition of Switch Media Limited for a total cash consideration of £1.25 million. Switch Media will have net cash on completion of c£100K so the initial outlay will be £925K.
This looks like a nice little bolt-on acquisition, which will further expand Iomart’s activities in the SME sector, currently serviced by its SME and micro webhosting business Easyspace (see Onwards and upwards for iomart). In the year to 31st December 2010 Switch Media had turnover of £1.3 million and EBITDA (adjusted for non recurring items) of £79K. The £18m (FY09) turnover iomart shouldn’t have a problem digesting this little snack. Indeed, it expects to achieve a significant level of cost savings on integration and reports that the acquisition will be immediately earnings enhancing.