Rapidly growing MSP Panoply has made its biggest acquisition to date, buying fellow MSP Keep IT Simple (KITS), a provider of services to public and private sector clients for £26m.
Panoply was founded four years ago with two employees and now employs over 420 plus contractors, with a market capitalisation of around £140m in December 2020 - compared to the £30m valuation at its IPO two years ago.
In the UK, KITS has built a reputation in the public sector for overhauling and running live and critical services such as payments platforms on behalf of clients including the UK government's Rural Payments Agency and the Department for Environment, Food and Rural Affairs (Defra). “The acquisition of KITS enables the group to bid for ever-larger contracts across both the public and commercial sectors,” said Panoply.
KITS enters the group having recorded unaudited revenues for the full year ended 31 December 2020 of £9.7m, adjusted net profit before tax of £2.7m and with £30.3m of “contract backlog to be recognised between 2021 and 2024”, Panoply said.
KITS, acquired from sole shareholder Grant Harris, will be integrated into the group's technology brand Foundry4.
Harris, CEO of KITS, will become managing director of a newly formed managed services division within Foundry4. The division will be provided with additional sales and bid management, HR and recruitment support to facilitate growth.
Following the acquisition, Panoply now expects total revenue and adjusted EBITDA for the year ending 31 March 2021 of “not less” than £48.5m and £6.6m respectively.
Neal Gandhi (pictured), chief executive officer of Panoply said: “Following a period of strong organic growth we have announced continued execution on our acquisitive strategy. KITS' reputation for delivering major service transformation programmes and for service integration and management is unparalleled.”
He added: “Their work at the Rural Payments Agency - after a series of well-documented failures by larger monolithic providers - has contributed to KITS' reputation as a credible modern alternative, providing outcomes and value that is orders of magnitude better than past options.
“We are now able to offer a truly end-to-end service to public sector clients.”
