Gamma partners have cheered news of its potential £1bn takeover by Epiris, saying it would enable the channel-led UCaaS provider to increase its focus and agility should it come off.
The LSE-listed giant on Tuesday confirmed its board is unanimously backing a 1,120-pence-a-share offer by Epiris, which was one of three bidders at the table alongside Waterland/Gamma and Providence Equity Partners.
Epiris said it plans to boost Gamma’s growth by investing in product development.
The deal – which is not set to close until the first half of 2027 – values the £646m-revenue giant at £1.02bn.
Analysts and market watchers have been closely scrutinising Gamma’s sale process, with one law firm in April warning a change of ownership could cause upheaval for its thousands of channel partners.
“Any change of ownership raises the question of whether the new owner will maintain, improve or restrict access to the platform,” Bratby Law wrote in a paper published in April.
The deal is also “another strong signal of private equity appetite” for the UK comms market following Providence Equity Partners’ investment in SCG, Cavell Group Principle Analyst Dom Black wrote on LinkedIn.
“Great news for the industry”
Neil Hall, CEO of Focus Group – which is one of Gamma’s largest partners – was quick to welcome the identity of its potential new owner.
“Should this go through it will be great news for the industry,” he told IT Channel Oxygen.
“Gamma has been the market leader for over a decade but more recently it has been held back. Hopefully this will enable them to refocus and move fast again to support customers.
“We see this as a good outcome for the channel given potential other scenarios.”
Taking Gamma private is a “positive move” given the public market “doesn’t seem to love the sector”, said Fraser Ferguson, CEO of KubeNet, a Glasgow-based MSP with thousands of Gamma seats.
“The story may have a bit to run yet”, Ferguson added, however, saying he “wouldn’t be surprised” if Giacom and Waterland came in with a counter-offer.
“Therein lies a dilemma for the channel. Will it be comfortable if Gamma and Giacom become one? I think there would be push back from a large percentage of smaller partners as they increasingly become a number,” Ferguson said.
“Personally, [I think] a combined business could disrupt the market in the positive and larger partners like KubeNet would welcome that.”
Dave Middleton, Group Finance Director at Flotek, was another MSP leader to give the potential union his seal of approval.
“As a valued partner of Flotek we welcome the news and believe private ownership should give Gamma and its management team more flexibility and agility to invest and work closely over the long term with their key growth partners,” he told IT Channel Oxygen.
Acknowledging that Gamma’s historical level of organic growth “has recently been more challenging to deliver”, Epiris said it intends to accelerate this via “product investments and a number of focused strategic initiatives”.
“Epiris believes that the additional flexibility that comes from a private company environment will enable Gamma to invest further and focus on sustainably improving the growth of its businesses over the long-term in order to drive value within its businesses for the benefit of all stakeholders,” it added.
In a statement, Gamma Chairman Martin Hellawell said:
“Gamma has built a leading position in European business communications through sustained investment in its products, technology, people and customer relationships. The Board remains confident in the Company’s strategy and long-term prospects. The Board has nevertheless concluded that the Acquisition provides Gamma Shareholders with attractive and certain value in cash. Having considered the terms of the Acquisition carefully, the Board intends unanimously to recommend it to Gamma Shareholders.”
Doug Woodburn is editor of IT Channel Oxygen
