Cloud provider Iomart acquires datacentre company Redstation for £8m

Glasgow-based cloud computing company Iomart has acquired Hampshire-based datacentre operator Redstation for £8m

Glasgow-based cloud computing company Iomart has acquired Hampshire-based datacentre operator Redstation for £8m.

Iomart has paid £6.6m as an initial consideration, of which £5.1m has been paid in cash and £1.5m by issuing shares.

A further contingent consideration of up to £1.5m is potentially payable in cash subject to Redstation achieving certain profit targets in the period ending March 2014. Redstation’s annual turnover for 2012 was about £5.2m.

Iomart Group already owns RapidSwitch, another provider of dedicated servers in the UK, whose datacentre in Maidenhead is currently being extended to provide space for additional servers to pre-empt future demand for data storage.

The acquisition of Redstation means it will now manage approximately 20,000 servers on behalf of its enterprise and SME customers in its 10 fully owned and managed datacentres across the UK.

Redstation owns datacentres in London’s Docklands and in Gosport. The company invested around £1m between 2011 and 2012 in its network to give customers high-speed access to the internet. It became the first provider in the UK to offer its customers data speeds of up to 100Gbps via a new high capacity network from Virgin Media Business.

Its acquisition will help Iomart to consolidate its position in the dedicated server market in the UK, Iomart’s chief executive Angus MacSween said.

Redstation’s customers deliver a wide variety of cloud applications and services so this acquisition further underpins Iomart’s position as the main provider of the complex infrastructure required by UK businesses to support the cloud environment, MacSween added.

Earlier this year, Iomart reported that its pre-tax profit was up 56% to £10.7m for the year ending March 2013. Demand for cloud storage, mobility and connectivity services has boosted its growth and revenues, according to the firm.

Since March 2010, when it reported its first year of profit, revenues have increased by 135%; profit before tax by 970%; and adjusted EBITDA by 430% - a reflection of the growing interest in cloud-based services.

Among the company’s 300,000 customers are Misys, the Science Museum, Logic3 and IT support specialist Cheeky Munkey.

“As part of the wider Iomart Group, we will have access to greater resources and technologies and will be able to offer wider range of cloud services to our customers,” said Martin Groom, managing director of Redstation

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