IOMART is set to become a specialist web hosting business after the £20 million sale of its business directory unit, Ufindus, to BT.
Shares in the Glasgow-based IT services company, which is listed on Aim, jumped almost 9 per cent on news of the disposal, which is expected to generate a one-off profit of £15m, about a third of Iomart's market capitalisation prior to the sale being
announced.
Chief executive Angus MacSween said the sale "in this more uncertain economic environment, reflects the quality of the business that has been built up and crystallises its value for shareholders".
Founded by Iomart in 2002, Ufindus provides listings and website development for more than 20,000 small and medium-sized businesses across the UK.
BT said it had bought "an acknowledged leader in online classified advertising" with 1.9 million online directory listings. Ufindus has 300 employees across five offices in England which will join BT.
Ufindus generated an operating profit of £1.46m on turnover of £14.1m in 2007. The sale includes net assets of £2.66m. Iomart finance director Richard Logan said the company had attracted interest from "more than two or three trade buyers".
Logan said Iomart was not surprised at the price it achieved, viewing the unit as strong and operating in a growing sector. But since the parent company moved into data centres, it has viewed the business as non-core.
"We took the view that it was more of a media play ... which is not where Iomart's strength lies," Logan added.
Iomart will use the funds from the sale to expand its data centre business, possibly through acquisition. That arm provides remote hosting for corporate customers, and business continuity services, providing back-up of data.
BT, the former state telecom monopoly, is already a customer of Iomart's data centres. Under the terms of the disposal, Iomart will continue to provide BT with web-hosting services for Ufindus.
Shares in Iomart closed up 4p at 49.5p.
The full article contains 339 words and appears in The Scotsman newspaper.
