iomart Group plc (AIM: IOM), the UK’s leading cloud company, has today (5 September 2013) completed the acquisition of Redstation, a provider of dedicated servers and managed services, for a maximum consideration of £8 million (US$12.4 million).

£6.6m has been paid as an initial consideration, of which £5.1m has been paid in cash and £1.5m satisfied by the issue of 515,464 new ordinary shares. A further contingent consideration of up to £1.5m is potentially payable in cash subject to Redstation achieving certain profit targets in the period to end March 2014.

Redstation owns and operates two data centres and offices in Gosport, Hampshire and provides a range of hosting services to around 3000 customers. Turnover in the twelve months to 31 June 2013 was £5.2 million.

iomart Group already owns RapidSwitch, another leading provider of dedicated servers in the UK, whose data centre in Maidenhead is currently being extended to provide space for additional servers to pre-empt future demand for data storage. The acquisition of Redstation means iomart now manages approximately 20,000 servers on behalf of customers of every size and in every major market sector in its 10 fully owned and managed data centres across the UK.

Angus MacSween, CEO of iomart Group plc, said:  ”The addition of Redstation will consolidate our position as the leading player in the dedicated server market in the UK. Redstation’s customers deliver a wide variety of cloud applications and services so this acquisition further underpins iomart’s position as the main provider of the complex infrastructure required by UK businesses to support the cloud environment.”

Redstation was founded 15 years ago by Lance Taylor and since 2008 he has run the company in conjunction with business partner Peter Appleton.

Peter Appleton, co-owner of Redstation, said: “I’m excited that Redstation is becoming part of iomart because we’ve been on the same journey. We’ve both built great reputations for excellence in hosting by investing substantial amounts of money to create the best data centres and network facilities backed by the best technical support. The combination of Redstation and iomart Group will be a powerful force in the market.”

Redstation has 33 employees.  Earlier this year it became the first UK customer to sign up to a new high capacity network from Virgin Media offering customers data speeds of up to 100Gbps.

Martin Groom, Managing Director of Redstation, said: “Redstation has grown to the point where we need to move to the next level, so becoming part of the leading cloud company in the UK makes perfect sense. As part of the wider iomart Group we will have access to greater resources and technical innovation and will be able to offer an even wider range of cloud services to our ever growing customer base.”