Cloud computing company iomart Group plc has agreed to acquire Extrinsica Global Holdings.

The Scotland-based firm, listed in London, has moved for the Microsoft Azure Cloud solution services provider in a deal worth an initial £4 million and potentially rising to £4.3m.

Of the initial consideration, £2m will be satisfied by the issue of new ordinary shares in iomart. The balance of £2m will be paid in cash, while iomart will also repay £3.7m of debt acquired on completion.

iomart says the acquisition aligns fully with its secure hybrid cloud strategy and adds 33 UK-based team members.

Extrinsica was incorporated in 2010 as a cloud services provider to micro businesses. In 2017 its current business model was established when it was invited by Microsoft to become one of the first 25 Microsoft Azure CSP partners worldwide.  It is now solely Azure public cloud focused.

For the year ended 31st March 2023, Extrinsica generated revenues of £7.4 million.

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Simon Smith, CEO and co-founder of Extrinsica, will continue to lead the business as part of the iomart Group.

“We are delighted to welcome the Extrinsica team to iomart, providing a large step forward in iomart’s capabilities to support existing and new customers in their use of Microsoft’s Azure cloud platform,” said Reece Donovan, CEO of iomart Group plc.

“Simon and the team have been at the forefront of the market developments of Azure since 2017 and have deep skills and expertise in this in-demand area of cloud computing, which will accelerate the initial investments we have made in our own Microsoft resources and capabilities.

“This is a meaningful step in our strategy as we position the Group for its next phase of growth as a leading secure hybrid cloud business.”

Smith added: “Joining iomart marks an exciting phase for our highly skilled, experienced and ambitious team, providing us with a strengthened platform for growth. It allows us to leverage joint capabilities, capitalise on our understanding of the markets we operate in and build upon our significant achievements to date.

“iomart has a long pedigree in cloud infrastructure, an impressive customer base and a growth strategy which I believe positions iomart well for future success. The team and I are all incredibly excited to be working as part of the wider group and look forward to being a key part of driving iomart’s ongoing success.”

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