Scottish data center provider Iomart has bought ServerSpace, a UK hosting company started by Irish enterpreneur Tim Pat Dufficy.

The announcement emerged as Iomart reported storng half-yearly results, but the markets responded with a 20 percent fall in Iomart’s share price on Tuesday. Iomart revenues went up by 28 percent to £24.6 million, and profit grew by 27 percent to £8 million. The company has grown large enough to do big deals with Microsoft, EMC and Dell, and has branched out into the US in the past year.

Iomart was founded in 1998 by Scottish entrepreneur Angus McSween who is still its CEO. It has acquired various rivals over the years, including Redstation in 2013, and RapidSwitch in 2009. This year it expanded its Maidenhead site and reportedly refused take-over bids from larger competitors.

Expansion continues
ServerSpace offers cloud and colocation but currently rents space, so the merger should allow Iomart to cut costs by moving ServerSpace’s big customers, which include the Jurys Inn hotel group, into its own data centers. Iomart has eight data centers in the UK alone.

“We have demonstrated a further strong performance as we continue to benefit from last year’s acquisitions of Redstation and Backup Technology,” said McSween, “and we have made a good start to the second half of the year.”

ServerSpace welcomed the deal: “The hosting market is hugely competitive and one of the problems we’ve had is that although we’ve got the expertise and know-how, we’ve often been beaten to the bigger deals because we’re small,” said a statement from Mr Dufficy. “Having the weight of a big and impressive parent company like iomart behind us will give us a much better chance of winning those deals.”

Iomart offers cloud services at levels from bare metal up, under a number of brands including Backup Technology The name “Iomart” may sound like a made-up tech workd, but it actually derives from the Gaelic word “iomairt” meaning” enterprise.