EXCLUSIVE: Kelway close to Panacea Services acquisition


EXCLUSIVE: Kelway close to Panacea Services acquisition

Paul Kunert

Kelway is in advanced talks with the management at London-based Panacea Services with a view to acquiring the managed services and virtualisation specialist.

In late 2006, Kelway sold a 25% stake in its business to venture capitalist Core Capital LLP and secured funds to go after acquisition targets with the plan to become a £100m reseller and the following summer bought Elcom in a pre-pack administration.

Peter Stroud, managing director at Panacea Services said it expected a deal to go through on 13 February and he will be given a seat on the board.

"We are the latter stages of negotiation, there are a few obstacles but due diligence has been done," he told Microscope, "we are a services centric operation and Kelway is product centric".

Of the 106 staff that Panacea employs 72 are technical consultants, "virtualisation is a big play for us and we are looking closely at Software-as-a-Service" said Stroud.

The Panacea Services brand is likely to disappear he added but insisted there will be no redundancies and both companies would continue to run separate offices.

In the latest set of filed accounts for the year to 31 March 2008, Panacea turned over £24.8m and made a profit before interest, tax, depreciation and amortisation of £750,000.

Phil Doye, managing director at Kelway, refused to comment directly on any negotiations but confirmed his business was still on a buy and build track.

"We are still acquisitive and are looking at a number of businesses but clearly we cannot comment on specific acquisitions until we are ready to announce a deal," he told Microscope.

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