CC counsels Telefónica Tech on its €398m acquisition of Cancom UK&I
Clifford Chance has advised Telefónica Tech on its acquisition of Cancom UK&I to build up a leader in cloud and digital services in Europe
Telefónica Tech has agreed with Cancom Group to acquire Cancom UK&I for €398 million. Telefónica Tech continues with its organic and inorganic growth plan, which is enabling it to consolidate its position as the leading company in digital transformation.
The deal, at a multiple of 13.5x EV/OIBDA (based on 2021E), will strengthen the capabilities of Telefónica Tech’s Cloud and Cybersecurity division in the UK and Ireland. Cancom UK&I has 600 professionals joining the Telefónica Tech team and a broad and strong digital services portfolio, including professional services and managed services in advanced IT, cybersecurity and multi-cloud solutions.
Cancom UK&I is a certified Microsoft Gold Partner for nine competencies, including Azure Expert MSP, CSP Direct, LSP, Surface Silver Partner and FastTrack and it also has other relevant partnerships with leading technology vendors.
Cancom UK&I reached €155 million in revenues in 2020, of which Managed and Professional Services represent more than 50% and are growing differentially. Cancom UK&I will reach 190 million euros of revenues in 2021 with an adjusted EBITDA margin of 15.4% and revenues related to Managed Services and Professional Services revenues project differential growth rates of 20% and 26% CAGR18-21, respectively.
This transaction reinforces the growth story of Telefónica Tech, whose revenues have grown by more than 25% in the first half of 2021 and above the sector average, as well as its positioning in one of Telefónica’s four key markets, the UK (the other three being Spain, Germany and Brazil).
José Cerdán, CEO of Telefónica Tech, said: “Having the Cancom UK&I talented team join Telefonica 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 B2B customers in their digital transformation strategy.”
“I am really delighted that Cancom UK&I are becoming part of the Telefónica Tech family. This is a fantastic next step in our company’s growth. Telefonica 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&I. This is great news for both our customers and our employees,” said Martin Hess, Managing Director Cancom UK&I.
Telefónica’s in-house team coordinated this matter from Corporación’s Legal M&A, which from a Legal point of view was managed by them with the support of the Telefónica Tech team. Antonio García-Mon (pictured top left), group vice general counsel & chief Legal officer, Cristina Fernández Gómez (pictured middle left), director-general counsel Commercial, M&A & Financial, Miguel Basterra (pictured bottom left), director-general counsel M&A, Elimena Junquera (pictured top right), Commercial manager, M&A & Financial, and Cristina Zurita (pictured middle right), Commercial manager. M&A & Financial, participated from Corporación’s Legal team. The legal team of Telefónica Tech involved Diego Colchero (pictured bottom right), Legal Affairs director.
The firm that advised Telefónica Tech was Clifford Chance, led by Melissa Fogarty (pictured top centre), joint head of Corporate from the London office, and Miguel Odriozola (pictured bottom centre), head of the Clifford Chance Antitrust team, from the Madrid office.
Heuking Kühn Lüer Wojtek and Stevens & Bolton advised Cancom on the deal.
