In a significant deal on the Czech IT scene, ARICOMA Group and Cordiant Digital Infrastructure Limited (CORD), a specialist investor in digital infrastructure, announce that, through its subsidiary České Radiokomunikace (CRA), it is acquiring Cloud4com (C4C) from ARICOMA Group, along with its data centre in Lužice (together “the Transactions”). The price of the Transactions are partly conditional on 2024’s results, but expected to exceed CZK 1 billion. The Transactions, which took legal effect upon signature, also includes the conclusion of a strategic cooperation between ARICOMA Group and České Radiokomunikace.
Cloud4com is being acquired for an initial consideration of CZK [870 million] (£[30.6 million]), subject to customary adjustments and with a further amount payable up to a maximum of CZK [485 million] (£[17.1 million]), depending on Cloud4com’s EBITDA for the year ending 31 December 2024. The data centre in Lužice (DC Lužice) is being acquired for CZK [130 million] (£4.6 million), also subject to customary adjustments. Both businesses are unlevered.
C4C is one of the largest domestic cloud computing specialists in the Czech Republic, offering its customers sophisticated and secure infrastructure as a service (IaaS) solutions.
The Transactions represent a significant advance in both the scale and capability of CRA in the Czech Republic’s fast-growing data services market. The Transactions also clearly demonstrate the implementation of the CORD’s “Buy, Build, and Grow” model.
"These transactions are an important milestone for CRA as we continue to diversify our operations into high growth areas such as data centres and cloud services. Cloud4com has achieved a leading market position in the Czech Republic and we see a clear strategic fit and synergistic value in adding Cloud4com and DC Lužice to CRA. We expect these assets to contribute strong revenue growth going forward and we anticipate capturing margin expansion due to increasing operating leverage. We look forward to working with the Cloud4com management team to further develop and grow the combined data centres and cloud businesses, and cement CRA’s leadership position in that area of the market,“ said Miloš Mastník, CEO of České Radiokomunikace.
Benn Mikula, CEO of Cordiant Capital, gave his assessment of the Transactions: “These acquisitions mark an important step in CRA’s continued growth in the Czech data centre and cloud services market. They add both capabilities and capacity to an already strong team. This market segment is increasingly important to CRA’s revenue mix.”
Steven Marshall, Chairman of Cordiant Digital Infrastructure Management, added: "We are delighted to have agreed to acquire these attractive data centre assets, which are being funded by organic cash flow at CRA. These transactions are highly complementary to CRA’s existing data centre and cloud businesses, enhancing CRA’s market leading position in its respective areas of operations and further demonstrating our active management approach through our ‘Buy, Build, and Grow’ strategy.”
"It has been great to watch C4C grow, evolve, and improve its products for nearly a decade, gaining loyal, satisfied customers as it matures. I'm very glad we took a chance on the quality team led by Tomas Knoll back then and today we are selling a company we are rightly proud of. I am very pleased that C4C's new owner, České Radiokomunikace, has such a strong position," said Michal Tománek, KKCG's Investment Director, who led the first investment in C4C by KKCG (which includes ARICOMA Group) in 2015.
"This divestment fits into ARICOMA Group's long-term strategy of further strengthening our position in consulting and implementing third-party cloud environments. We are happy to leave the actual provision of cloud technology as an investment-intensive industry to infrastructure players who focus on this area. The deal also includes a data centre in South Moravia, which we repaired in a flash after a devastating tornado struck the region in 2021, that meets the highest operational criteria. Of course, count on continued cooperation with České Radiokomunikace, as our portfolios complement each other well," added Milan Sameš, CEO of ARICOMA.
C4C's main business activity is providing infrastructure for the operation of applications and data storage as a service. The vPDC (virtual private data centre) service is offered through its own automated cloud platform, Virtix, to which most of Aricoma's cloud customers have been gradually migrated. Virtix enables the provisioning of infrastructure as a service, as well as many overhead services such as backup to the cloud (Veeam Cloud Connect) or infrastructure for critical SAP S/4 HANA systems.
In August 2023, C4C will have approximately 28 employees, which are mainly based in the Czech Republic.
About Cordiant Digital Infrastructure Limited
Cordiant Digital Infrastructure Limited primarily invests in the core infrastructure of the digital economy – data centres, fibre-optic networks and telecommunication and broadcast towers in Europe and North America. Further details about the Company can be found on its website at www.cordiantdigitaltrust.com.
In total, the Company has successfully raised £795 million in equity, along with a further €200m through a Eurobond with four European institutions; deploying the proceeds into four acquisitions: CRA, Hudson Interxchange, Emitel and Speed Fibre, which together offer stable, often index-linked income, and the opportunity for growth, in line with the Company's Buy, Build & Grow model.
CRA is a diversified digital infrastructure company, operating mobile towers, a broadcast network, data centres, a fibre network and Internet of Things networks serving utilities. The company has a history of offering superior customer service, increasingly through integrated solutions spanning the spectrum of digital infrastructure.
About Aricoma Group
ARICOMA Group is a leading European provider of IT services. It serves over 6,000 clients in thirty countries and employs over five thousand professionals. The group comprises companies operating under two main brands – Aricoma and Qinshift. Aricoma offers services in the areas of IT infrastructure, cloud technologies, enterprise applications, cybersecurity, public sector digitization, and system integration. Qinshift brings together companies specializing in software design for the commercial sector, outsourcing, and consulting.
KKCG is an investment and innovation group with expertise in lotteries and gaming, energy, technology, and real estate. Founded by entrepreneur, investor, and philanthropist Karel Komárek, KKCG employs over 10,000 people in 36 countries across its portfolio companies, with more than €8 billion in assets under management. Its businesses include, amongst others, ARICOMA GROUP Holding a.s., comprehensive IT services provider and custom software development worldwide; Allwyn, a multi-national lottery operator with leading market positions in Austria, Czech Republic, Greece, Cyprus, Italy, the United Kingdom and the United States (Illinois); MND Group, an international producer and supplier of traditional and renewable energy, active in drilling and exploration, energy storage, retail, and trading; and KKCG Real Estate which creates internationally recognized, award-winning architecture in the residential, commercial, and industrial sectors with a focus on innovative and sustainable development. With operations on several continents, KKCG businesses draw on capital, networks, and insights from across the group to enable profitable, sustainable growth for the long term. KKCG is committed to supporting the communities where it operates, contributing to the societies it works within.