UKFast weighs up IPO to fund future acquisitions

Cloud hosting firm wants to be able to buy companies currently 'out of reach'

Managed hosting firm UKFast is considering a potential float after a strong year of growth.

The Manchester-based cloud business has engaged global investment bank, GCA Altium, to help it review its options after achieving 18% organic growth last year, with a turnover of £47 million and a 45% EBITDA profit margin, which it expects to continue in 2018.

Founder and owners Lawrence Jones and Gail Jones have appointed GCA Altium to open up funds for further growth and investment, with an IPO being the main option being considered.

"We've given away shares in the company to loyal teammates who work incredibly hard, but we've never seriously considered selling shares before now," CEO Lawrence Jones said.

"Timing is critical and a great deal depends on market conditions, so that's why we've appointed GCA Altium."

So far, UKFast has proven to be a good judge of timing; since acquiring cybersecurity specialists S-IA at the start of 2017, that area of the business has doubled in size in the last 12 months, and Jones is looking for more financial clout to continue to acquire other firms.

"There are many more great technology businesses out there that complement UKFast and that we'd be interested in acquiring, added Jones. "An IPO gives us the funds and the clout to look at deals that are currently out of reach.

"The British hosting market is incredibly exciting and, whilst there's a lot of talk around AWS and Azure, the industry's adoption of multi-cloud strategies means there's a huge opportunity for British Virtual Cloudsviders to give the US organisations a run for their money."

UKFast offers managed hosting services for hybrid and private clouds, dedicated servers and colocation, focusing on the public sector. The family-owned firm fully owns and operates five data centres in Manchester.

Jones now feels the time may be right to float the company, and he cites his long-standing relationship with GCA Altium CEO Phil Adams as the deciding factor in appointing the investment bank.

"We've seen from the deals we're winning in the public sector and at government level that there's an appetite from British organisations to deal with other British organisations," Jones said. "By continuing to invest in our technology and our product set, I see UKFast as being the definitive British alternative."

The cloud firm is already expanding, just last week announcing its new venture, ClearCloud, which sells support for AWS and Microsoft Azure as it looks to broaden its multi-cloud offering.

"Smaller businesses and the medium-sized customers don't want to give people a blank cheque and [buying] Amazon is like giving someone a blank cheque because you don't really know how much it is going to cost," Jones told Channel Pro

Picture: Shutterstock

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