Business communications service provider Alternative Networks has bought computer network integrator Scalable Communications.

Alternative Networks is paying £7.5m in cash for Scalable Communications, with an extra £2.5m payable depending on whether the management's growth targets are reached.

The acquisition is expected to be earnings enhancing for the current financial year, which runs to 30 September 2011, and beyond.

Scalable's earnings before interest, tax, depreciation and amortisation (EBITDA) for calendar 2010 is expected to be £1.4m, up 45% on 2009's level, which itself was up 38% on 2008.

"We have been following Scalable for some time and recognised the value it can deliver to our business and the scope it offers to achieve this objective," said Alternative Networks' chief executive James Murray.

"We will now be even better placed, not only to cross sell these services across a growing customer base, but also to make further complementary acquisitions and continue to deliver long term shareholder value," Murray added.

Scalable's customer base complements that of Alternative Networks and further strengthens its presence in the larger small to medium enterprises market. Cross selling opportunities are strong with only Mitel pbx product sets being common to both companies.

Its legacy expertise in internet protocol (IP) will be a key asset to Alternative Networks as traditional telephony products migrate to Session Initiation Protocol. Scalable's management are all expected to remain with the group.

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