IT services company 2e2 has today announced the completion of its acquisition of Morse, which also operates in the IT services sector, for £69.8 million.
With Morse now under its wings, 2e2 is expected to deliver a larger portfolio of IT technology and services. It is also forecasting an annual revenue of £414 million, up significantly from before the acquisition.
TechEye spoke to Terry Burt, CEO of 2e2, about the news. He said that the benefit of the acquisition to 2e2's customers is the additional services it can offer: Morse will bring in new data resources, some long-term projects, and SAP capability. It will also give 2e2 additional geographies in which to work, including Ireland and Spain.
Terry said that 2e2 already has 1,300 staff and will gain an additional 1,000 from Morse. He said that the majority of Morse's existing staff will move to 2e2, but obvious duplication, such as in the management sector, will be omitted. He said there would be no prejucide with the moving of staff and that in the first six months the integration would be gentle while logistics are worked out. 2011 will see the rest of the staff moving over.
He said the deal is being financed by dosh from the London Stock Exchange. 2e2 is gaining an equity partner called Hutton Collins, which is investing £85 million of new equity. 2e2's other equity partner, Duke Street, is converting debt into £70 million of new equity, which provides a two-fold benefit to the company.
We asked if 2e2 had any further plans to expand its company. Terry told us that it's looking to increase annual revenue from £414 million to the £500 million mark sometime soon and would expect to acquire additional companies in 2011 or 2012 to reach this.
He said that 2e2 will remain focused in the IT services sector, but hopes to add management services and new geographies to its growing portfolio.