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Managed service specialist Nasstar has made the move to acquire KCOM’s national ICT services business to add more depth and coverage.
The deal, the terms of which were not disclosed, is subject to some completion conditions, but it should close in the next few weeks if all goes to plan.
The rationale for Nasstar is to get hold of a business that offers unified comms, cloud services and managed connectivity across the UK. KCOM has an established network of more than 700 partners that will provide Nasstar with a fresh route to market, as well as more geographical coverage and access to expertise around Amazon Web Services (AWS) and Microsoft Azure.
The tie-up would result in pushing Nasstar Group, which is majority owned by Mayfair Equity Partners, into the position of being one of the largest providers of managed services in the UK, employing more than 1,000 staff, with revenues well in excess of £120m.
Nasstar emerged as the revised branding for GCI, which opted to change in March 2021 after 20 years. The name Nasstar came as a result of that managed services player by GCI back in January last year.
Wayne Churchill, CEO of Nasstar, said that the latest deal would add more depth to the existing business and came with more national coverage. “KCOM will form a vital part of Nasstar’s growth strategy, and it will be integrated into the business, adopting new, efficient and scalable systems, and enabling customers to access an enhanced product set,” he said.
“We recognise the value and opportunities the combination of KCOM’s people, capabilities and customers represent, and we are confident that our strategy will turn this potential into long-term growth and success,” he added.
KCOM has gone through some changes, with firm was acquired by Macquarie for £627m in 2019. It became clear after a few months that the business would be broken off and various parts of the operation would be divested, and the firm’s broadband ISP Eclipse Internet business was sold to Global 4 for an undisclosed sum in May 2021.
Dale Raneberg, CEO of KCOM, said that the business would continue to focus on its core connectivity business and growing its wholesale and retail sales.
“We have agreed the sale of our national business to Nasstar, a UK provider of managed communications and cloud services to large businesses and public sector organisations. Our regional wholesale and retail business in Hull and East Yorkshire will remain part of KCO,” he said.
“Our team is investing £100m to expand our regional network, through which we are making full-fibre broadband available to consumers and businesses in towns and villages across East Yorkshire and North Lincolnshire.”
That fibre investment came in at approximately £100m and was used to expand the firm’s network beyond its traditional geographical customer base. KCOM made Hull the UK’s first full-fibre city in 2019, completing a full-fibre broadband roll-out to around 200,000 properties.