Telefónica Tech will buy 100% of Incremental, a partner of Microsoft in the UK, for up to £175 (around 209 million euros). With this acquisition, Telefónica Tech will considerably increase its scale in the UK and its offer of Microsoft technologies. Incremental has its headquarters in Glasgow, another 3 offices in the UK, in Bulgaria and India.
The company was founded in 2016 and has had strong growth rates both organically and via acquisitions (Redspire, focused on the financial services market and Adatis, specialising in data analysis, allowing it to offer an integral proposal of digital transformation for data analysis).
The incorporation of Incremental’s capabilities for business applications, power apps, data analytics and management into Telefónica Tech UK&I’s cloud services portfolio will enable it to have an end-to-end offering in the cloud for mid-market, large enterprise and government customers.
Incremental will bring with it some 350 employees, so the total number in Telefónica Tech will rise to 1,000 very qualified professionals, almost 25% of the total workforce of the division.
Telefónica has paid 13,7x EBITDA and 14,2x operating Cash Flow 2022e, excluding potential synergies.
Valuation: positive news, which reinforces Telefónica’s position in the technology area. It also endorses its strategy of investing in assets with greater growth and added value. Recommendation: OVERWEIGHT. Target Price 5,1 euros.
