Former SpiriTel chief raises £60 million war chest and spends just under half to buy three companies for formation of new managed data services Group, with more buys to follow
Alastair Mills, the former chief executive of service provider SpiriTel, has bought three companies for almost £30 million in total. He has received £60 million worth of backing from private equity group Penta Capital to form a new Group focussed on managed data services.
Penta, which backed SpiriTel when Mills headed up the service provider, has again supported him in acquiring data centre UKSolutions, MPLS provider NetworkFlow and voice services company Protel. The new Group has 60 staff across four offices with 900 customers.
Mills has also retained his core team from SpiriTel, including chief financial officer Ronnie Smith, commercial director Jonny Shanmuganathan and company secretary Andrew Booth. Another significant senior hire is expected to be confirmed within the next week.
The new Group said the three initial acquisitions provide a formidable growth platform which will expand through a clear strategy of providing three key managed services elements: core, connectivity and overlay services.
UKSolutions, which is based in Studley in Warwickshire, provides core enablement. Through its 15,000 square feet of data centres spread over two sites it delivers solutions that include the provision of dedicated managed hosting environments, hybrid cloud infrastructures and full private cloud architectures.
NetworkFlow provides access and WAN connectivity and through its own next generation network it provides high-bandwidth connectivity solutions for enterprises. It designs bespoke networks via more than 20 interconnects with major UK providers.
Protel provides overlay converged services that leverage the underlying core infrastructure and access technologies. Its services include global inbound and outbound voice delivery, voice business continuity solutions, fixed mobile convergence solutions and SIP trunk migration services, all managed via its bespoke customer portal.
The Group said it expects to complete its converged communications portfolio by acquiring mobile voice and data capability in the near future.
The SpiriTel management team, led by Mills and with the backing of Penta Capital, was responsible for bringing SpiriTel back to profitability before growing the company via a buy-and-build strategy. Between 2007 and 2010 the company grew through 12 acquisitions to reach over £35 million in revenue with 200 staff across five offices.
The acquisitions delivered an organic growth rate of over 20 per cent. When SpiriTel was sold to Daisy Group for £37 million in November 2010, Penta Capital realised a near 200 per cent return on their 2009 investment.
Mills said: “The market trends identified by both analysts and end-user clients are the same: managed data services will continue to grow rapidly, driven by the demand for cloud connectivity and virtualisation. At SpiriTel we faced a challenge familiar in the market: we were a voice company trying to turn into a data company.
“This time, our Group is very firmly focussed on growing from a strong data services core: we’re starting with 15,000 square feet of datacentre space, a next generation network and a full suite of IP voice services. We are ideally positioned to capitalise on an exciting growth market.”