July 9, 2008 -- (WEB HOST INDUSTRY REVIEW) -- UK managed hosting and data center services provider iomart Group (iomart.com) announced on Wednesday it has sold its Internet directory subsidiary Ufindus (ufindus.com) to British Telecommunications (bt.com) for £20 million.
The iomart board agreed to sell Ufindus after it performed a strategic review of the company, where it decided that the subsidiary was not essential to iomart's hosting and managed service overall strategy.
After receiving considerable interest from trade buyers, the board decided to find a new long term parent for Ufindus. Under the agreement terms, iomart will continue to provide BT with web hosting services for Ufindus.
Founded by iomart in 2002, Ufindus has grown to be one of the UK's largest new media directories businesses providing listing and websites for small and medium sized enterprise customers in the UK. Ufindus' operating profit for the year ended March 31, 2007 was £1,457k on revenues of £14,095k, with net assets at March 31, 2007 of £2,658k.
The sale is expected to bring iomart a profit of £15 million before goodwill adjustments, which the company will use largely to help expand its hosting and managed service operations. The directors are confident that the experience and expertise available within the Group will enable it to build a successful hosting and managed service business.
The company is giving certain warranties and indemnities associated with the sale, while £2 million of the consideration is being placed into escrow, £1 million to be released after six months and the remainder to be released after 24 months. Iomart says it expects to announce its preliminary results for the year ended March 31, 2008 on July 29.
"This disposal of Ufindus, in this more uncertain economic environment, reflects the quality of the business that has been built up and crystallizes its value for shareholders," says Angus MacSween, CEO of iomart. "We wish the business well under its new ownership. The disposal will allow iomart to focus on its core offering of its managed web hosting business, Easyspace and its data center operations, both of which are expected to perform well in the current market environment."
Last week, iomart won the contract to provide the IT backbone for Aroxo, a new online marketplace aiming to rival eBay.
