Second deal in a month
Dobbie’s Castle Street swoops on data centre
The Edinburgh-based acquisitions vehicle has paid £20.2 million in cash and shares for C4L Group Holdings, a network services and data centre hosting business.
The deal follows the £34.8m acquisition of Selection Services Investments early last month.
C4L has 45 staff based in Bournemouth and Docklands and has about 800 customers, primarily in the UK, with more than 90% of its revenues recurring.
In the three months to 31 January it has delivered an annualised turnover of £14m and run rate EBITDA of £2m with further growth expected.
Mr Dobbie (pictured) founded Edinburgh-based Castle Street out of the shell company left by the sale of the former online dating business Cupid. Now a non-executive director, he spent seven years at the cloud company Iomart.
In a statement, Castle Street said the acquisition will be immediately earnings enhancing and will fit its plans to build a broader integrated service offering to a larger client base while focusing on delivering higher margin services.
Mathew Hawkins, C4L chairman and founder, and Simon Mewett, chief executive, will join the Castle Street Investments board as chief technology officer and chief operating officer respectively.
Andy Ross, chief executive of Castle Street, said: “C4L, combined with our recent acquisition of Selection Services, demonstrates the progress we are making towards becoming an integrated IT Services and Cloud provider.
“C4L has a high quality, next generation infrastructure which has been well invested. Allied to a successful business with high levels of recurring revenue it offers strong growth opportunities.
“The enlarged customer base and product portfolio strengthen and consolidate our position in the industry and as a board we are excited by this acquisition which supports the next step in the Company’s development.”
Jonathan Watts, Castle Street chairman, added: “Matt and Simon have done an excellent job in building C4L. We welcome them to the Board and look forward to their contribution as we continue to execute on our focused growth strategy.”
Founded in 2000, C4L is a growing network services and data centre hosting business. C4L owns and manages core network infrastructure and data centre assets, including:
· coreTX™ – one of the UK’s largest privately owned 100Gbps MPLS network built on modern Juniper technology
· coreTX™ is ready for the next generation of software defined networking (“SDN”); offering a substantial advantage over most legacy networks
· fibre connectivity into over 50 data centres across the UK
· a 3MW data centre in Bournemouth
· one of the UK’s largest on-net DDoS Cloud protection platforms available in 50% of the UK’s data centres
· PortaOne – a carrier grade VoIP platform.