Interoute slips ring on cloudy hosting rival Easynet

Server space seller snaffles MSP to boost fighting weight ahead of possible float

Euro-bit-barn-operator-cum-cloud-hosting-provider Interoute is to wolf down pan-regional managed services outfit Easynet for £402m, including debts.

The transaction, which is subject to certain closing conditions, is all about cross-selling products and services to the firms’ respective bases of enterprise, public sector and service provider punters. Some cost cutting will likely help to massage the bottom line, too.

London-headquartered Interoute, majority owned by the Sandoz family, brought on board a couple of private equity houses in March to support an M&A drive after an existing investor sold a 30 per cent stake.

The blueprint is to double the size of the business in the next five years ahead of a planned flotation, and the buy of Easynet – easily Interoute’s biggest acquisition to date – is the first major step in that direction.

Clients using Interoute’s services – UC, computing and comms – include UEFA, the European Space Agency, and Saxo Bank, plus global telco operators and web content providers.

Easynet was part of the Sky empire from 2005 but was sold to LDC in 2010 and then acquired by MDNX in late 2013.

The last set of P&L accounts filed at Companies House show Easynet made EBITDA of £37.5m in the year ended November 2014, up 22 per cent on the prior fiscal. Sales were £221m, down 1.3 per cent.

Interoute said the combined operations would have turned over €700m in the 12 months ended 30 June 2015.

Mark Thompson, CEO of Easynet is expected to leave the organisation once integration is done and dusted. ®