Telefónica Tech acquires Microsoft partner Incremental for £175m

Telefónica Tech has announced the acquisition of UK-based Microsoft partner Incremental for up to £175 million, including potential contingent payments linked to future performance.

The move strengthens Telefónica Tech’s presence in the UK and Ireland, as well as its scale and competencies in Microsoft technologies, the firm said.

Launched in 2016, Incremental Group has become one of the leading Microsoft Dynamics Partners in the UK and is also a major player in the data and analytics market.

The company has been a Microsoft Business Applications Inner Circle member for the past three years and is one of just two partners in EMEA on the Redmond giant’s Global Advisory Board for data analytics.

The acquisition means Telefónica Tech now becomes one of Microsoft’s largest partners in the UK, with 16 Gold Competencies and 5 Advanced Specialisations.

Telefónica said the addition of Incremental’s business applications, power apps, data analytics and management capabilities to its cloud services portfolio will enable it to enhance its end-to-end cloud offering for mid-market, large enterprise, and government customers.

“We warmly welcome Incremental Group, and are delighted that this acquisition enables us to strengthen our position as a leader in the UK market for IT services,” commented José Cerdán, CEO of Telefónica Tech.

“We are now able to provide end-to-end Microsoft services, including digital transformation, managed services and data analytics, and achieve attractive cross-selling synergies with Telefónica Tech UK&I, complementing and positioning us as a leading Microsoft-focused company in the UK.”

Glasgow-headquartered Incremental has experienced significant organic and inorganic growth in recent years. Early last year, the firm acquired Redspire in a bid to expand its capabilities in the financial services market and become one of the UK’s largest Microsoft Dynamics partners.

It then snapped up data analytics company Adatis, which enabled the business to offer end-to-end digital transformation to customers.

Today, Incremental has more than 350 employees on its books, which will take Telefónica Tech UK&I’s headcount to around 1,000 staff post-transaction.

Neil Logan, CEO at Incremental Group, said the focus was on securing the “right support for the long term” as the business looked to the next stage of its development.

“Becoming part of Telefonica Tech propels us into the next phase of our journey and enables us to further scale the business, creating exciting opportunities for our people and our customers,” he said.