APSU plots US push after £7m investment
UK IBM partner planning organic and acquisitive growth assault in North America after bagging injection from Business Growth Fund
IBM partner APSU has scored a £7m investment that will underpin an organic and acquisitive expansion drive in North America.
The Cirencester-based firm says it was courted by about a dozen potential investors before locking down the investment from the Business Growth Fund, which saw the bank-backed company become a minority shareholder in the business last month.
Some of the funds will be used to bankroll APSU’s expansion into North America, the firm's commercial director Paul Bromelow told CRN.
“We have fairly aggressive growth plans and will be looking to treble the size of our business in the next three years,” he said.
APSU is unique in IBM's business partner community in that it supplies business continuity services to IBM in the UK and Europe on the vendor's Power i platform, which Big Blue then rebadges as IBM VSRi [virtual server recovery].
Bromelow said the US expansion will initially focus on catapulting the VSRi relationship across the Atlantic. This means establishing high-availability points of presence in IBM’s US resiliency services datacentres, he added.
“There are over 150,000 customers worldwide who use IBM’s Power i [formerly AS400] platform and about 65,000 of those are in North America,” he said. “The opportunity if you could get even one per cent of those customers to take a VSRi offering is significant.”
APSU is in the process of setting up a US office to support these activities but Bromelow said BGF’s funds have also been earmarked to acquire “like-minded” firms in the country.
APSU was formed in 2011 through the merger of IBM reseller Apex Computers and IBM managed services outfit AssurIT.
Bromelow said the firm’s placing last year at number 20 in the Sunday Times’ Tech Track 100 (after it grew sales from £2.1m to £25.6m over three years) turned heads in the investment community.
“We suddenly got a lot of interest from private equity and other organisations who wanted to look at us and understand our plans,” he explained.
“We were wooed by about a dozen different investment firms and at the end of February we gave exclusivity to BGF.”
Bromelow would not disclose what stake BGF has taken in APSU but the fund – which was formed by the five largest UK banking groups to help sub-£100m-turnover UK firms grow – typically demands a shareholding of between 10 and 40 per cent. Since its formation in 2010, BGF has invested in 67 firms, according to its website, including Oracle reseller Inoapps.
BGF’s arrival means some previous management at the firm who had retained minority stakes have relinquished their shareholdings, although chief executive Stephen Morris remains majority shareholder.
Besides the North American expansion, some of the £7m will be used to grow ASPU’s UK business, including in the areas of security, software licence compliance as a service and its traditional reseller business, Bromelow added.
“Penetration and security breaches in retail is a real problem at the moment – 95 per cent of penetrations are not actually noticed by the retailer; that’s why Target lost 56 million credit card details,” he said. “We are working with IBM to create a packaged offering for retail that will make that kind of exposure almost impossible."
“We are growing our business on the back of a tsunami wave of change in the IT industry," he said. "Many clients are taking a hybrid approach – buying equipment but looking to take advantage of the cloud where they don’t have the expertise themselves.”