Alternative Networks, a provider of mobile, networks, IT and billing solutions is to acquire Intercept IT for £12.95m in cash on completion, from the company’s founders. Intercept supplies hosted desktop solutions to the SME market, as well as desktop and server virtualisation services to enterprise business customers running on-premise IT infrastructure. Intercept's flagship hosted cloud solution, OnlineDesktop, is a Desktop-as-a-Service solution, delivered on a cost-per-user, monthly subscription basis. Alternative intends to migrate Intercept's IT infrastructure in due course to its own data centres, and increase the capacity of the platform.
In the financial year to the end of May 2013, Intercept generated revenue of £9.8m, but an EBITDA loss of £100k. However, Intercept’s profitability has improved of late following actions to reduce costs. The purchase is right in Alternative’s target area, with the company having previously stated that managed and hosted services acquisitions are of key interest. With Intercept on board, Alternative can broaden its managed services offering to enterprise customers. There are also opportunities to cross sell into existing SME customers.
Alternative Networks recorded flat revenue of £114m for the year ended 30 September 2013. Acquisitions are a key part of its growth strategy and its objective to deliver a broader range of services within its managed services offering. We therefore expect to see more acquisitions from Alternative as time progresses.
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