Bytes UK, a wholly-owned subsidiary of South African JSE-listed technology company Altron, has acquired UK-based IT reseller Phoenix Software, an end-to-end IT solutions provider with a solid 27-year history.
Altron Group CE Mteto Nyati says, “The acquisition, will bolster Bytes UK’s presence in the value-added reseller segment, particularly with respect to adding additional Microsoft capabilities to the group, which will in turn make us a significant UK partner to Microsoft.
“The acquisition also increases our international footprint, one of our key drivers for future growth as we seek to position Altron as a global ICT company through acquisitions and partnerships with other businesses in selected foreign markets.
“Furthermore, this acquisition enables Bytes UK to grow its footprint nationally and immediately have access to an additional 3,000 customers and new IT vendors. This allows us to cross-sell our current offerings into a new base, while offering Phoenix’s end-to-end solutions to current customers,” adds Nyati.
The combined entity will have revenues of £400 million and about 480 employees, enabling it to become an important scale partner to many of the major global IT vendors, and to work with clients across all sectors.
Neil Murphy, Bytes UK Group MD, explains that the acquisition adds scale to Bytes UK’s operations, while also driving synergies.
“The acquisition brings together two companies with different qualities and strengths to benefit our combined customer base. The combination process will not interrupt the day-to-day running of the company.”
Phoenix, one of the largest and most established UK IT resellers, derives more than 80 percent of its business from the public sector, while Bytes UK has traditionally served the corporate sector. Headquartered in York, Phoenix has a turnover of more than £130 million, and – through its 165 employees – provides end-to-end IT solutions including software licensing, software asset management and IT services.
“This acquisition is timely given Brexit and a consequently complex process that will doubtless demand an increase in government spend on IT,” says Murphy.
According to Murphy the acquisition represents a “great opportunity for employees from both companies to become part of a larger, growing business, where they can develop their skills and careers”.
As part of the deal, which came about after Phoenix’s current owners indicated they wished to retire, key employees will enter into two-year service contracts. No job losses are foreseen in the immediate future.
“I am eager to get to know our new colleagues at Phoenix and look forward to working closely with the combined team,” Murphy adds.
In addition, the deal will expand Bytes UK’s offerings across the UK, as it has, over its 35-year-history, predominantly conducted business in the south, while Phoenix’s focus has tended to be in the north.
Samantha Mudd, Phoenix Software MD, says the acquisition comes “at the right time for our company and employees given the fast-changing world of IT and the channel consolidation currently underway. We see considerable synergies and are excited about working with new complementary offerings and moving forward with ambitious growth plans across all our vertical sectors.