CloudCoCo eyeing further acquisitions after announcing Systems Assurance purchase

A conditional share placing of more than £2m will fund further acquisitions, it says

IT and communications MSP CloudCoCo has announced its intention to acquire Systems Assurance Limited, in what its CEO claims is a "transformative step forward" as the business embarks on a growth plan.

Systems Assurance includes a B2B value-added reseller, an automated cloud-based VAR and an IT managed service provider and will offer a "proven and scalable hardware engine into CloudCoCo's existing business as well as expanding its IT managed service offering", the MSP claims.

The net consideration for the acquisition is £0.83m in cash, £1.58m gross, and the acquisition has been funded through a conditional share placing which has raised £2.1m.

"This placing and acquisition is set to be a transformative step forward for CloudCoCo," CEO Mark Halpin said.

"It sees us progress to the next stage in our development - ‘Get Bigger' - which will see us focus on scaling the business while winning larger and longer contracts.

"I would like to welcome the Systems Assurance team to the fold. They bring with them fantastic technology and an impressive customer base that not only complement the existing CloudCoCo business but will help unlock its potential through driving substantial efficiency gains and introducing new cross-selling opportunities."

Systems Assurance posted more than £6m in revenue and £200,000 in profits for 2020, with CloudCoCo claiming the acquisition will also "increase the purchasing power of the enlarged group and broaden its product range".

The placing will also provide additional working capital to fund integration of the acquisition and will also provide headroom that could be used to fund further acquisitions, it adds.

"I am grateful to all those who have joined us on our journey through the placing. As well as making the acquisition possible, it has given us the opportunity to strengthen our balance sheet while giving us headroom to explore further M&A activity - a key focus for the group in the short-term," Halpin added.

"This is the start of an exciting new chapter in the CloudCoCo story and I look forward to reporting on further progress in due course."Syst