Managed service provider Claranet is acquiring cloud-based desktop software provider Star Technology Services for £55 million.
Charles Nasser, CEO of Claranet Group, said the deal would allow Claranet to provide a broader service portfolio to customers. "This is nothing short of a British entrepreneurial success story as both companies were founded here in the UK."
Star founded on-demand internet security business MessageLabs and is a well-established software-as-a-service provider to SMEs. The combined company will have sales of well over £120 million, around 700 staff and over 4,500 customers.
Claranet said Star customers will have access to Claranet infrastructure-as-a-service and data centre hosting services, although many of its smaller customers won't need them.
Kate Hanaghan, an analyst at TechMarketView, said, "Both companies are established providers in the mid-market with significant brand presence and credibility amongst buyers. The enlarged portfolio is an attractive option for enterprises that want to do less of their own IT in-house and that want to consume technology services in an alternative way."
She added, "If the management team at Claranet can really tap into this trend, the potential to scale will be substantial. In turn, Claranet itself would be an attractive target for purchase by a 'bigger fish'."