Kelway finalises acquisition of ISC Computers

Kelway has finallyconfirmed the acquisition of ISC Computers in a deal it claims will push revenues over the £300m barrier and expand the workforce to 700. Thetakeover of Cambridgeshire-based ISC - Kelway's fifth acquisition to date - is by far its biggest, adding more than £50m in reve

Kelway has finally confirmed the acquisition of ISC Computers in a deal it claims will push revenues over the £300m barrier and expand the workforce to 700.

The takeover of Cambridgeshire-based ISC - Kelway's fifth acquisition to date - is by far its biggest, adding more than £50m in revenues and 280 employees.

In a statement, Phil Doye, chief executive at Kelway, said: "Until now a small number of dominant players have controlled a majority stake in the ICT solutions and services market, limiting choice for enterprises."

"We believe Kelway now has the necessary capabilities and scale to offer a viable alternative," he added.

There are seven operating units under the ISC Computers umbrella brand; managed services, resources services, support services, continuity services, solutions, traning and product reselling. 

In fiscal 2009, ISC sales fell nearly 3% to £50.9m but profits rose 10% to £279k and it made an operating profit of £536. Staffing levels fell by 34 roles to 289.

"Kelway's acquisition of ISC Computers presents an excellent opportunity for our clients, partners and staff," said Simon Lawless, sales director at ISC Computers.

In the year to 31 March 2010, Kelway sales jumped 61% to £178m on the back of the Repton and SAM Practice acquisitions as EBITDA soared 97% to £8.3m.

Services represented one quarter of the year's gross margin, product reselling another 25% and solution selling the remainder.

The London-based reseller is tracking close to a £230m sales run rate for fiscal 2011, CFO Craig Compton told MicroScope back in September at its half year stage.

Commenting on today's acquisition, Kelway managing director Dan Laws said it was "making significant investments to substantially enhance our services portfolio."

Former Bell Micro credit boss for Europe, Eddie Pacey, now managing director at EP Credit Management and Consultancy, said this was "by far and away the biggest acquisition by Kelway".

Despite ISC's declining revenues in recent years as it developed a services operation, Pacey suggested that the business will not have come cheap.

"As with most acquisitions it is important the return on value paid is recovered and passed in short time. There will certainly be revenue gains and cost savings and integration as ever will be vital," he said.

"There is substance is saying an acquisitive model frequently has to continue acquiring in order to maintain momentum. This further cements the view consolidation will continue to accelerate in the coming year," he added.

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