Croft CEO: ‘We’re making another series of acquisitions in 2024’

Croft was a mobile comms reseller when you acquired the business [then known as Mobile Account Solutions] in 2020. What was the impetus to transform it into a broader IT managed services business?

Co-founder Ben [Page] and I had been long-time social friends and my last business was bought by BlackRock at the start of 2019. I was curious about taking what I’d learned about M&A in my former career, which was in financial technology, and morphing it into a new space – namely telecoms and IT.

What was interesting to me at that time was that the telecoms reseller market existed at all. It just seemed obvious to me that it’s an IT function and shouldn’t be a separate category. I’m quite certain that in ten years’ time, if not less, it won’t be a separate category because I don’t think there will be any telecoms resellers left.

The nature of this entire industry means it will just increasingly be IT companies that win this business. For me it was very simple: how do we turn ourselves from a very successful mobile business turning over £6m-£7m into a business that is IT led.

How many acquisitions has Croft made?

We did our first acquisition in April 2020. Since then, we’ve done 22. The first three or four were additional mobile resellers that gave us some more scale and geographies. Then we added about 13 or 14 UC providers.

Then, 15 months ago we bought our first dedicated IT MSP. A year ago, our revenue was maybe £20m and we probably only had £1.5m to £2m in what you would call IT managed service at that point. Then in the course of last year, we bought five specialists IT MSPs.

We bought one company that focuses on education IT support, one that supports onpremises IT solutions, one that uses colocation and one that uses Azure. Our job, I believe, is to make our range of services broad enough to support the customer’s journey, rather than telling them what their journey should be.

Today we’re a hair under 200 people and are running at something like £38m revenues.

What’s been your biggest business mistake?

One I definitely made is thinking too much based on numbers, rather than emotion. When emotions get involved, people do unpredictable things. I now try and spend more time thinking about the people and how they’re likely to react.

Most M&A roll-ups are private equity-backed. Why has Croft gone a different way?

Ben and I have taken the risk and done our own private equity-type deal, where we’ve raised private debt. And we’re actually going through a refinancing right now. We looked at a private equity deal last year but, frankly, we walked away because there just wasn’t as much value in it as we wanted. So we took a view that we would roll the dice again and refinance.

What keeps you awake at night?

I’m a massive perfectionist when it comes to service. I really obsess about trying to make sure we get the right customer experience. So it bothers me a lot when we fail do that.

What are your ambitions for the company now?

We think about our business being three columns – IT MSP, telephony and unified comms, and mobile. IT is something like 40% our revenues now, but we would like it to be nearer 60%. And so we’re making another series of acquisitions this year, which will be heavily focused on IT MSP-type businesses.

The rationale isn’t rocket science. If somebody trusts you with their IT infrastructure, it’s a lower ask to get them to trust you with their telephony, as opposed to the opposite. Are you really going to give me your cybersecurity, pen test business because I supply you with phones and SIM cards? Whereas if I look after your cybersecurity, your IT infrastructure, your servers and say ‘I can also supply you with your telephony solutions and internet into the building’, that’s obviously an easier sell.

Right now, we have just under 5,000 clients.

The idea is just grow the basket of solutions we sell into them.

Croft ranked 32nd in Oxygen Fast-Growth 50, which was produced in partnership with Giacom