Just a couple of days after sharing a strong trading update, managed service player CloudCoCo has acquired IDE Group Connect and Nimoveri from IDE Group Holdings for £250,000.
IDE Group Connect is a cloud support, connectivity and colocation datacentre provider and comes with MSP business Nimoveri, which it had acquired in June.
Revenue from the acquisitions was £13.6m, with 93% coming from recurring managed services contracts for the year to 31 December 2020. IDE Group Connect comes with about 570 customers in the UK and Nimoveri is serving a base of 90 SMEs.
Adam Eaton, founder of Nimoveri and current managing director of IDE Group Connect, has agreed to oversee a “short and accelerated full rebrand” and help integrate the businesses into CloudCoCo.
CloudCoCo has been undergoing changes since it was acquired by Adept4 in October 2019, with the management team taking the business through a “get fit” phase before entering its “get bigger” phase, which is about building scale through profitable growth.
The latest acquisitions add staff with expertise in cloud infrastructure, datacentre, networking and the Microsoft stack, as well as more recurring revenues. The management explained that the rationale for the deal also involved greater opportunities for increasing customer retention and boosting sales.
“The acquisition of IDE Group Connect and Nimoveri is truly transformational for CloudCoCo and provides us with the scale required to target bigger customers with larger budgets, as well as serving as a great catalyst for future expansion,” said Mark Halpin, CEO of CloudCoCo.
“Together, the acquisitions will almost double our current annualised revenues to around £27m and take our customer base to more than 1,000, with a multitude of new sales opportunities across the board, including enhanced private, hybrid and multicloud transformation projects through the addition of customer infrastructure in 33 data centres.
“We have demonstrated our ability to reset, recover and grow businesses of this nature by keeping things simple, and we are confident we will be able to replicate the success of the past couple of years with the acquired businesses.”
Halpin said the expansion would benefit customers and other partners it worked with, adding: “I would like to reiterate the company’s commitment to ensuring you receive the best possible experience when you choose to work with CloudCoCo.”
At the start of the week, CloudCoCo revealed in a trading update that it had seen some orders deferred because of the pandemic, but directors were still expecting revenue to “marginally exceed” the £8m it made in the year to 30 September last year.
“We have delivered a robust performance in spite of the challenges posed by Covid-19 with a substantial increase in trading Ebitda,” said Halpin. “We focus on doing the basics well and we will continue to invest in our people and ways in which we provide support to our customers.”