The €398m deal will see Cancom leave the UK and Ireland market completely and Telefónica expand its cloud and IT business.
Cancom is selling its UK and Ireland subsidiary, Cancom UK&I, to Telefónica Tech for €398m.
The deal will see Cancom divest entirely from the UK and Irish markets, while Telefónica’s subsidiary will take on 100pc of the share capital of Cancom UK&I, as well as its 600 employees.
Cancom is a Munich-headquartered provider of IT and cybersecurity services. Cancom UK&I was formed after the acquisition of a series of businesses by Cancom Group, including Belfast-based Novosco. Around 350 of the 600 Cancom UK&I employees are based in Belfast.
Spanish telecoms company Telefónica is best known in the UK and Ireland for being the owner of O2, though O2 Ireland was sold to Hutchison Whampoa in 2013. Telefónica Tech was formed in 2019 to manage the multinational’s range of cloud, security and other IT services.
José Cerdán, CEO of Telefónica Tech, commented: “Having the Cancom UK and Ireland talented team join Telefónica Tech will strengthen our cloud and cybersecurity capabilities in the UK and Ireland, with a strong focus on professional and managed services, and combined with our value proposition and global reach allows us to position ourselves as the strategic partner for our business-to-business customers in their digital transformation strategy.”
The acquisition will see the Spanish company realise a book gain of approximately €225m, which it said will be part of its net profit for 2021.
Cancom will receive about €390m in cash proceeds when the deal is completed, which is expected to happen in the third quarter of this year. The German company said it plans to reinvest the proceeds in acquisitions of its own, chiefly in its core German-speaking markets of Germany, Austria and Switzerland.
Martin Hess, managing director of Cancom UK&I, said: “This is a fantastic next step in our company’s growth. Telefónica Tech is a global tech powerhouse and we’re excited about what we will be able to deliver to our customers as Telefónica Tech in the UK and Ireland. This is great news for both our customers and our employees.”