With an estimated £10m to spend over the coming year, CEO Tim Mercer is most imminently on the lookout to buy a Northern IT support firm with Microsoft partner status. Of specific interest is a skill-set in the public cloud – particularly Azure and AWS (Amazon Web Services) – to complement Vapour’s private cloud offering.
A traditional voice company – particularly a PBX (Private Branch Exchange) or mobile supplier – is also being sought. With the voice industry now cloud-first, Vapour’s objective is to acquire a large customer base that needs to migrate from an on-premise to cloud offering – the company’s own speciality.
Already aiming to become a £12m business by 2020 – on the basis of organic growth alone – the goal is to accelerate Vapour’s expansion with these logical business procurements.
“We mark our fifth year in business this July, so as we look ahead to what the board is trying to achieve going forward, a buy and build strategy is a natural progression for the organisation,” said Tim.
“We’ve established a 96 per cent net recurring revenue rate to date, so our business development model is easy to maintain. We had a 64 per cent seed of growth in 2017, and hope to realise 65-80 per centby the end of this year.
“There are a number of well-established operators in this sector – dozens of which started out as lifestyle businesses – but many are not cloud-first,” Tim continued. “Of course, some are rising to the challenge and quickly adapting their offering to satisfy clients’ modern business needs.
“But cloud is an entirely different world. We therefore hope that by acquiring two – or more – of these such companies, we can successfully build on the legacy the current owners will leave behind, whilst supplying their customers with the next generation products and services they’re looking for.”
He added: “We are of course considering investments irrespective of geography. But the vibrancy of activity in the North is undeniable, and the synergies associated with augmenting our already reputable skill-set in the region will be vast.
“We’re passionate about flexible working too, so the more engineers, technical experts and customer service advisors we have in the North, the easier it will be to develop a larger, more diverse and engaged workforce.”
Based in Halifax, West Yorkshire, Vapour specialises in cloud secure voice, connectivity and storage solutions, and is currently a 32-strong team. The business has attracted £4m of private equity investment to date.