Yorkshire cloud tech firm Vapour commences acquisition trail

Succession Group

Yorkshire-headquartered technology specialist Vapour Cloud has announced its hunt to acquire at least two IT and communications businesses, as it prepares for growth of up to 80% in 2018.

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.

Mercer said: “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.

“We’ve established a 96% net recurring revenue rate to date, so our business development model is easy to maintain. We had a 64% seed of growth in 2017, and hope to realise 65-80% by 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.

“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.”

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.

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