German cloud and IT services provider Cancom is selling its UK and Ireland subsidiary, Cancom UK&I, to Telefónica Tech for €398m (£339m), which will see Cancom leave the UK and Irish markets completely.
Cancom acquired Belfast firm Novosco for £70m in 2019, along with approximately 350 of Novosco's staff.
Telefónica’s subsidiary will take on 100% of the share capital of Cancom UK&I, as well as its 600 employees, including the Belfast base.
The deal is expected to be completed before October and will see the Spanish company realise a book gain of approximately €225m, which it says will be part of its net profit for 2021 and would strengthen the capabilities of its cloud and cybersecurity division in the UK and Ireland.
Cancom will receive about €390m in cash when the acquisition is completed “within the third quarter of this year”. The German company says it plans to reinvest the proceeds in acquisitions of its own, chiefly in its core, German-speaking markets of Germany, Austria and Switzerland.
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Munich-headquartered Cancom was previously known as Organised Computer Systems Ltd. The “Cloud Transformation Partner" was acquired by Cancom in 2018 and renamed in early 2021 after a series of acquisitions.
Its UK and Ireland operations are expected to reach €190m (£162m) of revenues in 2021 and reported revenue of €155m (£132m) last year.
Spanish telecommunications company Telefónica is best known in the UK and Ireland for being the owner of O2, though O2 Ireland was sold to Hutchison Whampoa in 2013.
Telefónica Tech was formed in 2019 to manage the multinational’s range of cloud, security and other IT services.
“Having the Cancom UK and Ireland talented team join Telefónica Tech, will strengthen our cloud and cybersecurity capabilities in the UK and Ireland, with a strong focus on professional and managed services, and combined with our value proposition and global reach allows us to position ourselves as the strategic partner for our business-to-business customers in their digital transformation strategy," José Cerdán, CEO of Telefónica Tech commented.
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Martin Hess, managing director of Cancom UK&I, added: “I am really delighted that Cancom UK&I is becoming part of the Telefónica Tech family. This is a fantastic next step in our company’s growth. Telefónica Tech is a global tech powerhouse and we’re excited about what we will be able to deliver to our customers as Telefónica Tech in the UK and Ireland. This is great news for both our customers and our employees.”
NI entrepreneurs Patrick McAliskey and John Lennon founded Novosco in 2007 and it grew to be one of the region's most successful IT firms.
Customers of Cancom in Belfast include several large NHS Trusts and a number housing associations. The company also has offices in Dublin, London, Sussex, Cambridge and Daresbury, near Manchester.
