Maintel picks up Intrinsic Technology for a modest £5.25m price tag

Maintel has bolstered its Cisco expertise and influence in the network security sector with the £5.25m acquisition of Intrinsic Technology, a Cisco Gold Partner with a particular focus on medium to large size enterprises and public sector organisations. The deal boosts Maintel's revenues by circa £21m to £158m.

Synergies are expected to generate positive EBITDA and be earnings enhancing in the financial year to December 2018.

Maintel CEO Eddie Buxton (pictured) commented: "The acquisition of Intrinsic makes strategic and financial logic for our shareholders.

"Intrinsic has a track record as one of the UK's leading Cisco partners and significantly enhances Maintel's capability in networking.

"As well as further broadening our Avaya capabilities, the acquisition also brings the opportunity to offer Maintel's existing portfolio to Intrinsic customers, in particular our ICON suite of cloud and managed services".

Maintel intends to report Interim results for the six months ending 30 June 2017 on 11 September 2017.

Philip Carse, Analyst at Megabuyte, commented: "Maintel appears to be making a habit of picking up slightly challenged assets, with Intrinsic following last year's Azzurri acquisition, while in September 2013 Datapoint was acquired from the administrator.

"However, Maintel has clearly proven adept at integrating and leveraging such assets, in Azzuri's case securing £5m in run rate synergies from a £49m acquisition, in the process reducing the cost from 12x EBITDA to about 6.7x.

"Azzurri was also a much more substantial integration challenge than Intrinsic, at about double Maintel's then revenue base.

"Perhaps the main difference is that Azzurri's problems reflected an over-levered balance sheet, which limited its ability to invest but didn't prevent the company developing managed service capabilities, whereas Intrinsic seems to have struggled ever since the MBO, with the regular changes of CEO indicative of some fundamental issues.

"However, it clearly has inherent capabilities, given its public sector success and Cisco and Avaya partnerships, and the integration and financial challenge is more than reflected in a modest acquisition price."