The mid-market offers good opportunities for growth and Pulsant’s 2011 results show it is one of those growing players in a good position to capitalise on them. The private equity-backed company - which until last week was known as Lumison / DediPower / BlueSquare (see Lumison rebrands as Pulsant) - grew by 18% in the year to December on a pro forma basis to reach annual revenues of £26.7m.
There’s positive news on margins too. Management have clearly found synergies between the three businesses that were brought together to form this business (see Lumison adds third leg to managed services stool), with EBITDA rising 55% on a pro forma basis to reach £8.7m. That gives Pulsant an EBITDA margin of 33%, compared to 25% across the three businesses in 2010.
What these numbers also underline is that Lumison, DediPower and BlueSquare were pretty healthy businesses before they were acquired by the larger group. Profitability and growth prospects have been enhanced post integration as you’d expect, but these were far from turnaround cases. That makes absolute sense - with so many potential M&A targets to choose from across the fragmented UK mid-market infrastructure services space, why choose those that need a lot of work to get them in shape?
The priorities for 2012 include increasing data centre capacity to support the company’s growth. Talking to Pulsant CEO Mark Howling, it’s clear that he intends to stick to Pulsant’s knitting, namely co-lo/hosting and managed services for the UK mid market. We agree that there are strong prospects right there for a financially-solid player with increasing scale, so why stray?