Logicalis acquires 2e2's European operations for £20.7m

Logicalis takes on board 480 of 2e2's European employees and takes 70 former 2e2 staff on in the UK

Logicalis has agreed to acquire four European subsidiaries of the defunct computer services company 2e2 for €24m (£20.7m).

The managed services provider will acquire the Spanish and Irish systems integration businesses, which had operated under the Morse division that 2e2 had acquired for £69.8m in June 2010.

Logicalis will also take over the Channel Islands business and 2e2's operation in the Netherlands.

The UK business is not part of the deal, but Logicalis has stated separately that it will take on approximately 70 employees from the defunct 2e2 UK operation.

Logicalis is owned by technology group Datatec and was formed when the group acquired UK-based networking integrator Logical Networks in 1997.

The Spanish operations of 2e2 that it is acquiring are based in Madrid and Barcelona, and focus on enterprise managed services.

The Irish operation, based in Dublin and Cork, provides enterprise hardware, and software and services. It has partnerships with IBM, NetApp and HP, among others.

The Channel Islands operation focuses on IT services, while the Netherlands operation acts as an IT service management (ITSM) consultancy and provides ITSM solutions.

"This transaction delivers on our stated intentions to grow our European presence and augment our solutions and services capabilities. In particular, the Spanish business is strategically important to us to strengthen relationships with our multinational clients in Latin America," said Ian Cook, CEO of Logicalis.

"The ITSM consultancy business further enhances our services offering and allows us to introduce it to Logicalis' wider international audience. It also allows us to deliver an enhanced portfolio of communications and collaboration, datacentre, managed services and cloud services to these new markets," he added.

As a result of this complete transaction, Logicalis said that it would expand its operations by more than 480 employees among the four subsidiaries it is taking over, as well as the 70 former 2e2 staff it is also taking on. It added that it expects to generate annualised revenues of about $150m (£99.75m) from the acquisitions.

"2e2's international businesses attracted a lot of buyer interest and traded strongly through a difficult period. We are pleased that we were able to reach a successful transaction for all four businesses with Logicalis," said Chad Griffin, joint administrator of 2e2 and senior managing director at FTI Consulting.

Nearly 1,000 of 2e2's employees were made redundant after the company's UK business plunged into administration on 28 January.

The problems with 2e2 brought to light the difficulties customers can have in ensuring the security of their data, and understanding where their data is stored by a vendor.

Last month, 2e2's datacentre business was acquired by Oakley Capital Private Equity, who then appointed Daisy Group to manage it. This would have come as a relief to many of 2e2's customers, after 2e2's administrators FTI Consulting had demanded upfront cash payments totalling £960,000 from them to keep the facilities open and operating.

But last week, it was revealed that 2e2 outsourced large amount of data it was managing for clients to third parties, raising question marks over the due diligence that companies need to perform before putting data and applications "in the cloud".