Northern Irish partner Xperience Group eyes UK expansion as it looks to double revenues

MD Iain opens up on company restructure and three-year plan to double revenues to £25m

Northern Irish MSP Xperience Group is aiming to make at least three acquisitions as it looks to double its revenues over the next three years.

Based in Lisburn, near Belfast, Xperience is a solutions provider offering managed services and cloud as well as ERP and CRM solutions.

Its key vendor partners are Microsoft and Sage, with the former accounting for around 60 per cent of its total turnover.

The Xperience business operates from offices in Lisburn, Peterborough and Glasgow and employs around 120 staff. The firm's customer base mainly consists of SMEs trying to drive digital transformation in their businesses.

Speaking to CRN, its MD Iain O'Kane said that he believes Xperience is a "well-kept secret" in the UK channel.

O'Kane became MD of the business following an MBO in 2009, and led two acquisitions - in 2011 and 2013 - before acquiring a majority stake in Xperience Group in 2016.

Since then, O'Kane has restructured Xperience's management team, installing a CFO in Fergus Mcllduff at the beginning of this year and bringing in Ben Marnham as chairman.

Marnham previously led and co-invested in the Horizon Capital-backed MBO of Nottinghamshire-based MSP Timico (which recently rebranding to Digital Space), where he was also CEO for two years.

The management team laid out a new three-year plan this year which includes more than doubling the business' £12m revenues to £25m by 2023.

The firm is expecting to be hitting double-digit organic growth each year leading up to the milestone, but this won't be enough on its own to reach the £25m revenue goal.

O'Kane said Xperience will also need to acquire around £10m in revenues over the next three years to hit that target, which will mean it will need to buy up around three firms within that time frame.

The solution provider is already in talks to buy up companies across the UK, with O'Kane telling CRN that acquiring to boost its managed services business will be most likely.

Xperience is steering clear of the London area, or inside of the M25, because it's too crowded with competitors embarking on M&A sprees of their own, O'Kane said. Instead, the firm is more likely to target acquisitions around its hub in Peterborough, but could be persuaded to land elsewhere in the UK if the company itself is the right fit.

Around 65 per cent of the Lisburn-based firm's revenues are recurring, O'Kane said, which puts Xperience in an enviable position in the UK channel.

The firm also has a strong balance sheet, said O'Kane, which means it has capital to spend on M&A.

"Our plans are in place to get the business to £25m by 2023. But out of the corner of my eye, I think £40m could be achievable by 2025," he said.

"We have a very compelling proposition and approach; we're building deal flow at the moment and we've got three to five conversations going on with acquisition targets," he said.

"I think we're a really, really well-kept secret," he added.

The Northern Irish firm could potentially look for acquisitions around its Sage and Pegasus portfolio, but O'Kane questioned whether business owners working with these vendors might be overvaluing their assets.

"There's a lot of consolidation also going on within the Sage and Pegasus base, so I could talk myself in and out of looking to target some acquisitions there," he said.

"You've got owner directors that are maybe looking to exit. They have, rightly so, been very close to the business and growing the business for 25 to 30 years, and therefore they expect to be rewarded accordingly. The unfortunate thing is that sometimes my expectations don't meet their expectations. But you know, if you invest for 30 years of your life, and to building a business you're perfectly entitled to feel that way."