FluidOne eyeing more M&A this year following SAS Global Communications deal, claims CEO

FluidOne eyeing more M&A this year following SAS Global Communications deal, claims CEO

Cloud and networking aggregator interested in beefing up managed services, contact centre and IoT business following latest acquisition

FluidOne is planning to stay on the M&A trail this year as it looks to bolster its managed services, contact centre and IoT business.

The London-based firm, which is backed by private equity house Livingbridge, has been maintaining a steady rate of acquisitions over the last few years, most recently acquiring networking specialist SAS Global Communications.

Speaking to CRN, CEO Russell Horton said FluidOne will typically look to acquire twice a year in order to build out the "best quality connected cloud solutions provider" in the UK.

The firm made two acquisitions in 2020 in the shape of Mitel partner PSU Business Technology and cybersecurity specialist Cyber Security Associates. The spree was followed up in 2021 by its purchase of SAS Global Communications which took FluidOne past £60m in revenue.

Horton said he is looking to purchase "quality businesses with happy customers" and with capabilities in managed services, contact centre or IoT.

"We're not looking for distressed businesses, we're looking for quality and it's got to fit with the connected cloud. So you have to really go under the bonnet to see if it's going to fit strategically, because, if it's already a good quality business, then that allows it to get up to speed quicker and cross sell quicker to our base," he said.

"We have a whole M&A team who just focus on mapping the market and meeting owners. It also needs to be right to the owner, because we might want an acquisition where we want some of the management to stay on, and if they don't it won't be a good fit."

Sometimes "pseudo PE" deals are struck with businesses owners, in which FluidOne acts more like an investor in the business, setting it up as a standalone "centre of expertise" while providing it with resources to grow.

"We sometimes say: ‘We'll use you as overlay to the base rather than merging you in'. So Cyber Security Associates is a separate business - we give them help and support but they run their business."

Meanwhile its recent acquisition of SAS Global Communications will open up the enterprise market for FluidOne.

Its typical customer tends to have more than 1,000 staff, whereas FluidOne is typically stronger in the mid-market.

The acquisition will also bring in new SD-WAN capabilities with Cisco, adding to its existing strength with Fortinet and Velocloud.

SAS Global Communications' currently has very low penetration of unified comms and mobile solutions, Horton said, which will give FluidOne an opportunity to sell into its customer base with its core offerings.

"We're now one of the most joined up SD-WAN providers in the UK with depth of skills," he said.

"All three of those tools have different strengths and weaknesses in features and cost. I'll address more of the market by having the three leading products on the wagon."

Before its latest acquisition, around half of FluidOne's revenues were generated by selling through channel partners. Only around 20 per cent of SAS Global Communications' business is through partners, Horton said, pushing the balance of FluidOne's business more towards direct sales.

Despite this, indirect sales will remain an important part of FluidOne's business. Around 80 to 90 per cent of its indirect business is generated by just 20 reseller partners which include the likes of SCC and Softcat.

"We see the channel as one of our biggest organic growth areas", the CEO said. "I think developing 20 to 30 really key partners where we can really help them make money will give us higher growth than selling to a mass market where actually you're just providing a product and a portal but you're not selling through and with them".