Telefónica Tech has today signed and completed the acquisition of UK-based Incremental, one of the fastest growing Microsoft partners in the UK, for up to £175 million (approximately ¤209 million), including potential contingent payments linked to future performance. Telefónica Tech thus strengthens its capabilities and presence in the UK and Ireland, where it operates under the Telefónica Tech UK&I brand.
In the market since 2016, Incremental Group has two key specialized business areas. It is a major Microsoft Dynamics partner in the UK and is also a major player in the data and analytics market. It has been chosen as a Microsoft Business Applications Inner Circle award winner for the past three years and is one of only two EMEA partners on Microsoft’s Global Advisory Board for data analytics.
Incremental has experienced significant organic and inorganic growth in recent years. In early 2021, it acquired Redspire to expand its capabilities in the financial services market and become one of the largest Microsoft Dynamics partners in the UK. In October 2021, it acquired data analytics company Adatis, enabling it to offer a comprehensive digital transformation proposition to the group’s customers.
It is headquartered in Glasgow, although they have offices across the UK, as well as capabilities in Bulgaria and India. In total, it has more than 350 employees, bringing Telefónica Tech UK&I’s workforce to around 1,000. In this way, the British subsidiary contributes almost 25% of Telefónica Tech’s global workforce.
The deal amount values the company at 13.7 times its gross operating profit (EV/OIBDA) and 14.2 times its operating cash flow (EV/OpCF), based on its expected results for the coming year and excluding potential synergies.
“We are delighted that this acquisition will enable us to strengthen our position as a leader in the UK IT services market. We can now offer end-to-end Microsoft services, including digital transformation, managed services and data analytics, and achieve attractive cross-selling synergies with Telefónica Tech UK&I, complementing and positioning us as a leading Microsoft-centric business in the UK,” commented José Cerdán, CEO of Telefónica Tech.
Neil Logan, current CEO of Incremental Group, says he is “immensely proud of what Incremental has achieved since its inception just over five years ago. As we look to the next stage of our evolution, it was important for Incremental to have the right long-term support. Being part of Telefónica Tech propels us into the next phase of our journey and allows us to scale the business further, creating exciting opportunities for our people and our customers.”