Scotland business

Cinven drops takeover bid for web hosting firm Iomart

computer servers Image copyright AP
Image caption Iomart operates eight data storage centres in various part of the UK

Private equity firm Cinven has pulled out of a takeover bid for cloud computing specialist Iomart.

Last month Cinven subsidiary Host Europe Holdings announced it had made a third approach to the Glasgow-based firm, after two earlier bids were rejected.

But in a statement on Monday, Cinven confirmed it had terminated talks with Iomart.

It also said it was "no longer considering making an offer".

Regulators had given the parties until 16 September to conclude talks over a possible bid.

On 19 August Host put forward a possible cash offer for Iomart of 300p per share, valuing the company at about £320m. It followed earlier proposed offers of 275p and 285p.

Senior managers at Iomart had indicated their support for the latest proposal.

Iomart has eight data storage centres in the UK, including Glasgow, London, Manchester and Nottingham.

In May, Iomart reported revenues climbed by 29% to £55.6m in the year to the end of March, with its hosting business growing by 40% to £44.7m.

Adjusted pre-tax profit rose by 37% to £14.6m.

In a statement to the stock exchange Angus MacSween, chief executive of Iomart said: "The Group has delivered strong growth as we continue to execute on our focussed strategy of providing high quality and high margin managed solutions.

"With an outstanding track record and an established reputation as the UK's leading cloud computing company, we look forward to the future success of Iomart."

Iomart shares fell sharply on the news.

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