Bulletproof has acquired Cloud House Limited, a cloud services provider and Amazon’s largest AWS Advanced Consulting partner in New Zealand. Bulletproof is paying roughly 10X EBITDA for Cloud House, ChannelE2E estimates, though much of the valuation is based on future financial targets that are undisclosed. This is Bulletproof’s third acquisition -- and the second deal involving a major AWS consulting partner.
Bulletproof shared some key valuation metrics for the deal. According to the company:
"Bulletproof paid NZ$1m to purchase the business assets of Cloud House from existing cash reserves, bringing approximately NZ$3.5m annualized revenues, with around NZ$500k of current run-rate EBITDA to the Company. The owners of Cloud House may earn up to a further NZ$4.2m, split between cash and shares, payable based on performance targets to be achieved up to 30 June 2017, or earlier if achieved earlier."
Cloud House Valuation In U.S. Dollars
So what does all that mean in U.S. dollars? Here are the rough figures, based on February 1, 2016, currency exchange rates and ChannelE2E calculations:
- Bulletproof paid about US$650,000 up front for Cloud House.
- Bulletproof will pay another US$2.75 million or so if Cloud House meets certain financial objectives
- That means the total deal could be worth more than US$3.4 million.
- Cloud House's current annual EBITDA run rate is about US$325,000.
- Deal valuation: That means the deal's valuation is a potentially healthy 10X EBITDA, though a big portion of the deal's value hinges on future financial targets for Cloud House. Bulletproof did't publicly disclose the specific target goals.
Of course, ChannelE2E's valuation can potentially be a bit misleading since some of the payment potentially involves Bulletproof stock instead of cash. Also, Cloud House's EBITDA run rate will likely rise by the time earnouts are potentially paid.
Buying Up Cloud Consulting Firms
Cloud House is the third cloud consulting company that Bulletproof has acquired. The previous deals involved Panthacorp, an AWS Consulting partner (December 2014), and Infoplex, a private cloud provider (October 2015).
Across the globe, IT service providers and integrators are seeking to acquire cloud consulting firms that specialize in Amazon Web Services; Google Cloud Platform; Microsoft Azure and Office 365; Oracle Cloud; Salesforce.com; ServiceNow and WorkDay, just to name a few.
Recent deals have involved:
- Accenture acquired Cloud Sherpas and CRMWaypoint.
- Edwater Technology purchased M2 Dynamics, an Oracle platinum partner focused on the cloud.
- CTComp buying Salesforce.com application and cloud specialist CASE Partners.
- Vital Network Solutions purchased Octari to bolster Office 365 and Azure engagements.
Overall, ChannelE2E believes the IT service provider M&A wave will grow larger from now through at least 2022, based on a mix of factors -- including ownership demographics and technical expertise.
