Strategically important transaction; gives Gamma market presence in Germany
Gamma Communications plc (“Gamma”), a leading technology-based provider of communications services to the business markets in the UK, Spain and the Netherlands, is pleased to announce that it has acquired c80% of the issued share capital of HFO Holding AG (“HFO”) on 1 July 2020 (and has an option to acquire the remaining c20% over the next three years).
HFO is one of the leading SIP Trunk providers in Germany with an excellent reputation for product quality and end-customer service. It has a strategy to build on this expertise in both the VOIP and broad business communications market and has recently started to sell Cloud PBX offerings through its extensive network of channel partners across the German market.
As part of its stated European expansion strategy, Gamma had previously identified Germany as a key target geography. With an overall market of c.36 million PBX seats (almost twice the UK market size) but a cloud penetration of only c6% (one of the lowest rates in Western Europe), the German market for cloud telephony is forecast to grow rapidly.
Gamma believes that it can use its commercial strength and expertise of developing and selling a market leading cloud PBX solution via the channel to accelerate HFO’s growth in the emerging Cloud PBX market in Germany. In the UK, Gamma has been able to convert a strong presence in the SIP Trunk market into a market leading presence in Cloud PBX. Gamma’s team will work with the experienced management team from HFO to replicate this success in Germany.
Like Gamma, HFO sells mainly through a network of resale and wholesale partners and dealers and also to end users directly.
HFO also provides B2B mobile services through its well-known Epsilon brand with over 100,000 connections per year that are sold through its resale partner and dealer network. This presents an opportunity to sell a mobile based Cloud PBX product through this channel, where HFO has an excellent reputation for customer service and delivery.
Andrew Taylor, Gamma’s Chief Executive Officer, commented: “The acquisition of HFO provides Gamma with a fantastic opportunity to enter the German market – one of the largest but under-penetrated Cloud PBX markets in Western Europe. We warmly welcome all of HFO’s staff and customers into the Gamma family and we look forward to working with them.”
Achim Hager, CEO of HFO, commented: “We are delighted to be completing the move to Gamma and see this as the next step in the development of our business. We believe that we can combine our experience of the German market with Gamma’s experience of taking Cloud PBX into the channel to develop a leading Cloud PBX business in Germany. It is great to have found a partner with similar values and approach.”
HFO has been providing communications services to the SME segment in Germany since 1997. Like Gamma, HFO initially offered traditional voice products (such as carrier pre-selection) but has enhanced its portfolio by adding next generation IP-based solutions. It has been selling own SIP Trunks since 2011 and started selling Cloud PBX solutions more recently.
Through its Epsilon brand, HFO is also a large B2B mobile distributor in Germany, offering mobile connections from all three major mobile network operators.
Headquartered in Oberkotzau, Bavaria, HFO employs approximately 150 people and operates nationwide in Germany through a reseller network of over 1,000 partners.