Node4 bolsters MSP position with Starcom Technologies buy

Managed service provider (MSP) Node4 has taken steps to bolster its market position after acquiring Starcom Technologies, the MSP division of K3 Business Technologies Group (K3).

The total consideration for the disposal was £14.7m, including £500,000 cash on the balance sheet, paid entirely in cash on completion. It is the largest deal in terms of headcount for Node4 and gives the business more footholds across the UK with offices in Scotland, the north-west and south-east England.

Starcom Technologies is an MSP with revenues in the region of £11m and a 280-strong national customer base using the partner for cloud managed services and hosting expertise with enterprise resource planning (ERP) systems including SYSPRO, Sage and Microsoft Dynamics.

Following the deal, the 80-plus staff at Starcom Technologies will join Node4, along with the senior management team including managing director Neil Farnworth, director of hosting services Steve Donaghue, director of technical services Darren Harrison and sales director Stuart Buckley.

Under the terms of a transitional services agreement, Starcom will continue to provide K3 and its customers with managed services for at least three years.

“Welcoming Starcom Technologies, its management team and entire employee base to the Node4 family is an important step for both organisations in our shared mission of helping businesses on their journey to the cloud and digital transformation,” said Andy Gilbert, CEO at Node4.

“As a fast-growth business, keeping our core values at the centre of what we do is crucial, and we worked hard to identify an organisation that would complement and enhance both our service offering and company culture.”

In response, Farnworth said the acquisition would be positive for the Starcom Technologies business. “Our shared culture and commitment to exceptional service are in complete alignment, and this deal will ensure those values are maintained as we scale together,” he said.

“I am extremely pleased that Starcom employees will have the opportunity to grow and enhance their skills with access to Node4’s expertise and services. We are looking forward to playing a key part in developing the exciting roadmap of cloud-led, digital transformation services that Node4 has in store.”

For K3, the decision to part with Starcom gives the business some income that will be used to strengthen its balance sheet and eliminate net debts of around £2.3m.

Adalsteinn Valdimarsson, CEO of K3 Business Technology Group, said that Node4 “is an excellent new home for Starcom with its focus exclusively on managed services”.

He added: “The deal enables us to accelerate our strategy of growing our own IP product revenue. We wish Starcom great success for the future.”

Node4 is no stranger to using acquisition as a means of expanding the business; back in 2019, it picked up the private cloud provider Secura to underpin its ambition to provide more hosting services to the software-as-a-service (SaaS) market.