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There have been some suggestions that this is the time to invest in the M&A market to bolster operations and establish the foundation for growth.
Aliter Capital is one of those which will add to the examples of forward-looking investments in Q1, after completing a deal for Milton Keynes-based networking and managed service player ITM Communications.
As part of the deal, the current ITM management team, Mike Jackson, Mark Barber and Lynda Ayris, will remain with the business, along with its 85 employees. That management team was responsible for leading ITM through a management buyout back in 2010.
ITM director Mark Barber said the backing of Aliter would give the business, which already covers most of the UK, the chance to support future growth.
“We have been aware of Aliter for some time, and having seen what they achieved historically with North, a business operating in sectors similar to ITM, we believe strongly the added support of the right investment partner with significant experience and resources will help us accelerate the next stage of ITM’s development,” he said. “It’s an exciting prospect, and we are enthused by the opportunities this will bring to our customers, suppliers and staff.”
Aliter has been following a strategy of investing in both organic growth and using acquisitions to strengthen its position, and made it clear that it would be continuing to look for complimentary opportunities after the ITM move.
“ITM is a great example of the type of business we are looking to back, where we can use our sector expertise to support future growth,” said Aliter partner Greig Brown, who has joined the ITM board as a non-executive director. “We have a strong track record in this sector, and see clear potential to grow this business, both organically and through bolt-on acquisitions.”
Although M&A activity declined last year, there are expectations that the picture will improve over the course of 2023, and that investments will increase. Some of that will be driven by venture capitalists looking to tech as a place to gain growth, but there is also a desire by many to expand their footprint to gain fresh customers and skills.
Claire Trachet, CEO and founder of business advisory Trachet, is among those expecting acquisition levels to rise this year, and is advising clients to make sure they have done their due diligence, have the funds in place and are ready to move quickly to take advantage of opportunities.
Consolidation has become a feature of life in the channel, and Eric Herzog, chief marketing officer of Infinidat, is among those expecting it to continue this year.
“Consolidation within the channel will continue in 2023 – both within the partner community and with the IT vendor community,” said Herzog. “Channel partners need to be aware of this trend, as it will affect the dynamics in the industry going forward.
“Channel partners will need to remain flexible and adaptable, monitoring the consolidation in the channel and with their vendor base, which will create both opportunities and challenges,” he said. “The strength of relationships between channel partners and their preferred vendors will be a factor in the outcomes of consolidation.”