GCI has announced the acquisition of Freedom Communications. It is adding the unified communications specialist to a list of five acquisitions over the last twelve months. That list includes the cloud company Outsourcery who it bought only 6 months ago. Acquiring in order to grow the business in the managed services space is not unique. Both Daisy and Azzurri are building or have built larger organisations. Daisy themselves bought Alternative Networks just before Christmas at a valuation of £184 million. This acquisition is probably less than that figure.
A Strategic acquisition?
Adrian Thirkill, CEO at GCI confirmed that it was a strategic decision to add the unified communications (UC) specialist to their growing company. Besides UC,GCI is focusing on cloud, compliance and security as it looks to strengthen its position in the managed IT services market.
Freedom adds 40,000 Skype for business seats bringing GCI to more than 180,000 in total. While this pushes GCI higher in the Microsoft Skype table for MSP’s it was probably not the primary reason for the acquisition. Thirkill commented: “Freedom’s heritage and skills as a Unified Communications Systems Integrator, and its focus on transitioning customers from old world to new, is perfectly aligned with our own growth strategy and is a great fit for us.”
One key reason for the acquisition is the talent that Freedom has amongst its workforce. However GCI will need to be careful about how it treats them during the acquisition. There is no mention of synergies of culture between the two organisations. This means that GCI will need to communicate successfully what the acquisition will mean to staff. Keeping them onside during often tricky integration process is key to a successful acquisition.
Access to public sector
The other key reason is that Freedom is listed on 9 of 11 lots of the RM1045 Network Services Framework. This enables public sector organisations to choose them when selecting telecommunications services. GCI were not listed amongst the original suppliers. This acquisition will enable them to deliver a strong offering in future bids across their portfolio.
GCI is already working with Ealing Council to deploy a major Skype roll out. It is one of the largest in their sector to date. Surprisingly they have no wins on the digital marketplace though.
Conclusion
This is a smart acquisition to begin the year with by GCI. The access to the public sector market that it enables could only have been achieved in this way. For Freedom, it gives the business unit a chance to grow and become part of something larger. The big question is whether the joint leadership team can retain the talent that Freedom has built up.
Pat Botting, Managing Director at Freedom Communications commented: “We are delighted to share this announcement. Our investment and growth alongside an almost unique, holistic go-to-market model coupled with GCI’s comprehensive managed service and cloud solutions make this acquisition the most significant that the UK Unified Communications (UC) market has seen to date. Not only is this great news for our people, but it is also great news for all our customers now gearing to full UC adoption. Exciting times ahead.”
