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Spanish telecoms giant Telefónica snaps up CANCOM’s UK&I unit

Telefónica Tech, the cloud, security and IoT unit of the Spanish telecoms giant best known for being the joint owner of Virgin Media 02 with Liberty GlobalO2, is buying Cancom’s UK and Ireland operations.

The purchase, which was announced alongside record quarterly profits for the firm, is surely a bet on continued digital transformation in the UK and beyond in the wake of the Covid-19 pandemic.

Cancom UK&I will give Telefónica Tech – which currently operates primarily in Spain, Germany, and Latin America – a solid local platform for pushing into the UK’s enterprise cloud market.

Cancom Group on the other hand, is expected to take the €390m in cash proceeds and consolidate control over its German-speaking markets of Germany, Austria and Switzerland with acquisitions of its own.

The 600 staff currently working for Cancom UK&I, which includes around 350 IT professionals in Northern Ireland, will now move to Telefónica, bringing with them existing contracts that set a strong foundation for local growth in the dynamic enterprise markets of cloud, cybersecurity, big data and the Internet of Things.  The Belfast branch of the business in particular, formerly known as Novosco, has a number of accounts with public sector organizations including the NHS.

“Having the Cancom UK&I talented team join Telefonica Tech will strengthen our Cloud and Cybersecurity capabilities in the UK and Ireland”, said José Cerdán, CEO of Telefónica Tech, in a statement. “Combined with our value proposition and global reach this allows us to position ourselves as the strategic partner for our B2B customers.”

As digital transformation accelerates, the potential attack surfaces of organizations grows, stoking demand for cybersecurity and cloud services like those provided by Telefónica Tech. This appetite is reflected in significant acquisition activity in the sector over the last few years, with buyers often seeking to add specific tech capabilities and scale into geographically strategic hotspots such as the UK.

“The merger of Virgin Media and O2 is seismic for the UK telecoms market and will lead to some really interesting developments over the coming years. There is significant scope for M&A as the combined business divests non-core units and acquires to build on its already considerable strengths… watch this space!” says Marcus Allchurch, Partner at Acuity Advisors.”

Acuity Advisors

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