GCI Network Solutions is to acquire the entire business and assets of Outsourcery Hosting following the appointment of EY as administrators. Outsourcery suspended trading on AIM earlier this month stating it is no longer able to present its results for 2015 by the deadline of the end of June.
In April the company, which was co-founded by former Dragon's Den star Piers Linney, warned it needed short-term working capital, and it was investigating alternatives to raise money, including a fundraising, restructuring and the sale of non-core assets.
Later that month, Outsourcery reached an agreement with its principal secured lender, mobile giant Vodafone Group, for the terms of a new conditional drawdown working capital facility to provide it with funding while it realised its assets.
Outsourcery said Friday it has progressed with restructuring, including talks with third parties about the sale of business assets. It said it continues to carefully evaluate the approaches for the assets, as well as other options to strengthen its immediate and long-term financial position.
It said that the talks have had 'no material adverse impact' on its current business activity, as it has secured new contracts and continued with further project development.
In May 2013 Linney floated his tech firm on AIM with a market capitalisation of £34.6m, but the company's market value has since slumped.
Sam Woodward, Joint Administrator and Restructuring Partner at EY, said: "Over a number of years Outsourcery had invested significantly in its IT infrastructure and cost base in anticipation of strong revenue growth from its O-Cloud platform. In practice, the pace of revenue growth was below expectations resulting in Outsourcery suffering trading losses and cash flow pressure.
"The Board was unable to secure additional working capital funding and as such, commenced a process to identify potential buyers for the business.
"I am pleased to report that following that marketing process, we were able to secure a sale of the majority of the Outsourcery business to GCI Network Solutions immediately following administration, which presents an excellent outcome for the business, preserves approximately 100 jobs and provides continuity of service for its customers.\"
GCI CEO Adrian Thirkill stated: "Outsourcery has some great underlying characteristics, some talented people, a strong Skype for Business capability, an impressive customer base, some well-engineered platforms and lots of potential. We see this as a nice fit for GCI.\"
Thirkill emphasised that the deal is not a capability purchase. "We already have considerable expertise in the cloud and UC space, including tens of thousands of Skype for Business seats deployed across the UK and Europe via our direct and indirect sales channels," he explained.
"The acquisition builds upon an already strong foundation and raises our profile in a market reported to be growing at five times the rate of traditional voice services. Most importantly, this acquisition also provides assured continuity of service for all of Outsourcery’s customers, resellers and partners.\"
GCI is a Vodafone Platinum Partner (through its London-based Commsxchange operation) a Microsoft Gold Partner and a Virgin Media Business Strategic Partner. "This is a capable blend which positions GCI nicely in the ascending UC market,\" Thirkill added.
Wayne Martin, GCI’s founder and Chairman, stated: "This is another well-considered step in GCI’s journey, a journey that started more than 15 years ago and now sees GCI with a nationwide presence from London to Glasgow, a joined up portfolio of fully managed IT services, and customers across multiple sectors, from small businesses to 700 site organisations.
"GCI’s raison d’etre has always been about building an integrated, disciplined and tech savvy organisation able to take customers on a consultative transformational journey.
"Traditional voice just isn’t cutting it any more, UC is the new kid on the block. The benefits in terms of productivity gains, collaboration enhancements and the avoidance of time and cost routinely frittered away on trains, planes and automobiles is a message that’s really starting to hit home. The acquisition primes us perfectly to be a leading player in the UC space.\"
GCI's Chief Strategy Officer Scott Riley will oversee the Outsourcery operation and its integration. He noted: "This acquisition, when combined with our own Microsoft Centre of Excellence, gives us the ability to accelerate our penetration of a market forecast for double digit growth through to 2020. That is an exciting prospect.\"