365itms in talks over second acquisition in M&A drive

MSP acquired Poole-based Deverill in April

MSP 365itms has set its sights on a second acquisition four months after completing the first takeover in its M&A drive.

Steve Ellis was brought in to Reading-based 365 - having built up and sold reseller Notability to Logicalis - to oversee a period of growth that started with the acquisition of Poole-based MSP Deverill in April, a deal which doubled 365's revenue and headcount.

Ellis told CRN that he has been in talks with four firms over potential acquisitions, with one still ongoing.

"If we could do a deal that quickly [by the end of the year], then yes we'll do it," he said. "If we can find the right one, at the right price, then sure, we'd like to do it sooner rather than later. We're not trying to slow any process down, it's just that it takes time."

Ellis said that any future acquisitions will more than likely be made to bolster the professional services offering, now that Deverill has given the firm a full services offering.

Because of this, top-line revenue will not necessarily increase, with the focus more on "the quality of revenue rather than the quantity of revenue", he explained.

Even though we've doubled our turnover, the majority of our revenue still comes from service. We're keen to ensure that continues to be the case," said Ellis.

"You won't necessarily see a change from £20m to £40m [revenue] - you might see a change from £20m to £25m but that extra £5m will all be some form of services.
That's more important to us than top-line revenue growth."

The Deverill name has gradually been phased out, with the signage at its Poole office set to be replaced next week.

365 will hold a customer event at the Poole office on 22 September to officially launch the new expanded company.

The acquisition of Deverill, which is an HP and Microsoft partner, has given 365 a formal relationship with HP for the first time and also gives the firm increased capabilities around Office 365 and Skype for Business.