Overview:
On 29 July 2021, Telefónica Tech announced that it will acquire Cancom Group’s UK and Ireland business (Cancom UK&I) for $473m.
Through this acquisition, Telefónica Tech continues to execute on its inorganic growth plan and consolidate its position in the digital transformation space.
Cancom UK&I augments Telefónica Tech’s presence in UK which is one of the four key markets for the company.
About Telefónica Tech:
Founded in 1987, Telefónica Tech is the digital transformation services arm of Telefónica, a telecommunication services provider in Europe and Latin America with 112,349 employees worldwide.
Telefónica Tech offers a wide range of services and integrated solutions in cybersecurity, cloud, IoT, big data and blockchain.
Based in Spain, Madrid, Telefónica Tech recorded $1.84bn revenue in 2020.
About Cancom UK&I:
Founded in 1990, CANCOM UK&I is a digital transformation company which represents all business activities of the CANCOM group based in UK and Ireland.
It provides professional and managed services for advanced IT, cybersecurity and multi-cloud solutions.
CANCOM UK&I has partnerships with Microsoft, HPE, Cisco, Citrix, Dell, PureStorage, VMWare, Zerto, ServiceNow and Veeam.
Based in Shoreditch, UK. CANCOM UK&I recorded $184m revenue in 2020.
Rationale of the transaction:
The transaction will be completed at an enterprise value of $473m, representing an EV / Sales multiple of 2.6x based on 2020 financials.
Through this acquisition, Telefónica Tech expands its digital services portfolio advanced IT, cybersecurity and multi-cloud solutions in the UK and Ireland markets.
It strengthens Telefónica Tech’s partnership with Microsoft as Cancom UK& is a certified Microsoft Gold Partner for 9 competencies and adds several new partnerships with leading technology vendors.
It will greatly enhance Telefónica Tech’s presence in UK with the addition of over 600 professionals.
It builds on the recent purchase of Altostratus Cloud Consulting, a Spain-based cloud consulting company specializing in multi-cloud services.
Telefónica aims to accelerate Telefónica Tech’s growth through acquisitions and plans to carve it out to enhance the company’s agility and capitalize on increased demand for IT services.
The Chesapeake Group was not an advisor in this transaction.