Kelway has finalised a deal this afternoon to acquire virtualisation and managed services specialist Panacea Services for an undisclosed sum, which the organisations claim will create a £140m technology business.
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As expected, this is the second acquisition made by Kelway - it bought Elcom out of administration in the summer of 2007 - since it sold a 25% stake in the business to VC Core Capital LLP which boosted funds to pursue acquisitions.
In a statement, Phil Doye, chief executive at Kelway, said its buy and build strategy was not yet complete.
"We will continue to seek out further complementary additions to the company, enabling us to fulfil our growth plans despite this tough economic climate," he said.
Peter Stroud, managing director at Panacea - which employs 110 staff, 70% of which provide project and technical services - will join the board and becomes Kelway head of solutions and services as the Panacea brand will disappear.
He said the deal was a good fit for both organisations because Kelway was more reliant on product sales whereas it leads on services so the two could easily cross sell to existing and new customers.
Both firms are HP Gold partners - Panacea was named 2008 Mid-market Preferred Partner of the Year and Dave Poskett, director of the vendor's solutions partner organisation gave the deal his seal of approval.
"It is encouraging to see two of our Gold accredited partners coming together. This can only help their respective HP customers," said Poskett.
In the last set of filed accounts for the year to 31 March 2008, London-based Panacea Services turned over £24.8m and made a profit before interest, tax, depreciation and amortisation of £750,000.
For the six months ended September 2008, Kelway grew revenues 35% to £55m but the firm's management refused to reveal interim profits for the period.