Telefónica Tech – the cybersecurity and cloud wing of the Spanish-owned telecoms giant – has forked out €398m (£340m) to German outfit Cancom Group's UK and Ireland operations.
The deal is being seen as granting Telefónica a decent toehold in the UK's enterprise market.
Some 600 IT professionals from Cancom UK&I are moving over to Telefónica Tech bringing with them a digital services portfolio including professional and managed services in advanced IT, cybersecurity, and multi-cloud.
Cancom UK&I is the result of three acquisitions by the German VAR between March 2018 and October 2019, each designed to broaden the firm's reach beyond traditional product businesses in German-speaking countries.
In 2018, Cancom acquired unified comms provider Ocean Intelligent Communications. A few months later it shelled out £29m in cash and shares for British enterprise tech supplier OCSL.
And in November 2019, it spent £70m to acquire Belfast-based public-sector reseller Novosco.
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Employing some 300 people, it is this last buy that gave Cancom access to existing NHS, housing association, and charity punters as well as inking its name on the list of pre-approved cloud suppliers for NHS Shared Business Services.
Telefónica Tech is a relatively new player within the brand. It came about as an amalgamation of the telco's IT, cloud, and security services contracts and up until its UK acquisition operated principally in Spain, Germany, and Latin America.
According to Megabuyte analyst Indraneel Arampatta, this deal speaks of Telefónica desires to make a splash on the UK tech scene.
"Telefónica, having just merged its O2 mobile business with Virgin Media, clearly has major ambitions of its own in the UK, with Cancom UK the landing platform for a more aggressive push into the UK upper mid-market/large enterprise.
"UK management will stay in place, and lead possible acquisitions that add further cloud, IT and security capabilities. Leveraging the skills of Novosco and that big NHS contract, a major part of the UK push will centre around significant other opportunities in the health sector."
Last year, Cancom UK&I notched up revenues of €155m with managed and professional services accounting for around half of turnover. The biz is currently on course for around €190m in revenue for 2021, it said. ®