Phoenix IT Group to acquire KCOM network break fix arm


Phoenix IT Group to acquire KCOM network break fix arm

Microscope contributor

Phoenix IT Group has been hotly tipped to acquire KCOM Group's network maintenance services business by early next week.

Hull-based KCOM embarked on a major cost-cutting programme after notching up significant losses in 2008. It restructured the business including closing its product resale division and outsourcing network management to BT.

According to channel sources, divestment of the network break-fix division which employs around 140 staff in total, including upwards of 100 engineers, represents another step toward reshaping the group to focus on higher value areas.

"KCOM is trying to carve out its support and maintenance business and Phoenix is close to buying it," said an insider close to the situation.

The business was originally part of the low-end engineering element of Omnetica, which KCOM acquired in December 2004 and is estimated to turn over around £15m annually, serving vendors including Cisco, Nortel and Siemens.

It was put up for sale in September but the response from one channel source was that the unit seemed quite expensive given the level of engineers employed, "it seemed like a lot of cost for not a lot of customers."

The 300-strong customer list includes HSBC, Lloyds TSB, DEFRA, the University of Dundee and power and gas provider Eon, spread across 8,800 sites in the UK.

Phoenix IT Group already provides maintenance services to a number of Cisco accredited integrators/ resellers across the UK, so that addition of the KCOM unit would increase economies of scale.

KCOM and Phoenix IT Group refused to comment.

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