Cloud computing and internet hosting firm Iomart has continued its strategy to expand through acquisition by paying up to £11 million for an English company.
United Communications, which trades as United Hosting, is based in Hemel Hempstead, Hertfordshire, and also has its main data centre there.
In addition it has rented data centre space in London and Dallas in the United States along with a support function in India.
The company, founded in 1998 and which provides hosting and other online services, has around 6,500 customers with the majority of those in the small business sector.
Iomart, which has its headquarters in Glasgow where it employs more than 200, is paying an initial £7.5m in cash.
The remaining £3.5m will only be paid if United hits underlying earnings targets in the financial years to April 2016 and 2017.
Angus MacSween, chief executive of Iomart, said: “In line with previous acquisitions made by Iomart, United Hosting is a profitable, growing business whose services reflect those we offer.
“As such, the business fits well within our acquisition criteria and will be a valuable addition to the group.”
Brothers Matt and Simon Wallis, the co-founders of United, both intend to stay with the business.
Matt said: “This is a huge opportunity to develop and grow the business. We are now backed by one of the leading providers of managed hosting and cloud services in the UK as well as a company with all the regulatory and financial strength that comes with being listed on the London Stock Exchange. Having met with Angus and his executive team we believe they can take us to the next level of success.”
Annual accounts for United show it made £1.3m of pre-tax profit on revenue of £2.4m in the 12 months to April 30 this year. That was up from profit of £1.04m on turnover of £2.06m.
In June this year Iomart paid an initial £9m for cloud computing consultancy SystemsUp. A further £3.5m could be payable if the London company meets performance targets.
Iomart then boosted its war chest for acquisitions in July after agreeing a £60m funding package with Bank of Scotland.
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