TOM O’Hara, the Scottish IT veteran who fronts the fast-growing Kick ICT Group, is relishing being in control of his own destiny. In fact, the Glasgow-based entrepreneur admits things could scarcely have gone any better since he established Kick – a vehicle to acquire and develop IT businesses – with Alan Turnbull and David Chazan in 2015.
Declaring its intent with the acquisition of Glasgow-based Talon Business Solutions, a provider of IT services that found itself in the doldrums, Kick has since snapped up two other independent Scottish consultancies.
Bonnyrig firm Roxxap was acquired in November last year, and that was followed this month with a deal for Glenrothes-based Vorezo. Both have become part of the Talon brand and, Mr O’Hara hopes, will be joined by a further addition before the year is out, with due diligence under way on a third acquisition.
The takeover spree has resulted in Kick outstripping its initial growth aspirations, with profits and turnover already comfortably exceeding forecasts for the Finnieston-based consultancy. Last year, the company booked a net profit of £61,000 on turnover of around £1.2 million. This year, it is on course to double turnover to £2.4m and serve up net profits “in excess” of half a million pounds. Mr O’Hara said it means the firm, which specialises in Microsoft solutions, is “moving towards professional services-type returns”.
“If you look at lawyers or accountants who are doing well, I would stress, they are in the 30 per cent-plus net profit bracket, so we are heading towards [that], which is great,” he said. “In reality we wanted take the profit number from £60,000 to £340,000, and we’re going to exceed that by £200,000.
“It’s everything, the ducks have lined up and the stars have aligned at the same time. It was just one of those years and a good time in which to add things into the group like Vorezo.”
Mr O’Hara added: “It has gone better by a factor than we had expected, because obviously when we bought into the Tallon business two-and-a-half years ago it was struggling. The first year and a bit or so were just sowing the seeds of being a professional services IT consultancy business.”
Mr O’Hara came to Kick after a stellar background in the Scottish IT sector. But he didn’t begin his career in computing. An accountancy graduate from Heriot-Watt University in Edinburgh, he started out in the George Square office of Ernst & Young (EY).
From EY Mr O’Hara switched to work in finance with a company called ComputerLand, then headed by former Scottish Government minister Jim Mather, until it was acquired by Skills Group. He then set up the ISI Group consultancy, with the purchase of DataCAD, going on to add to the group with McLaren Consulting and Cadspace. Describing this period as an “adventure”, ISI launched McLaren in the US and Europe, before it was ultimately sold to Penta Capital in 2000. Penta then snapped up Cadspace the next year.
Mr O’Hara’s next move was to acquire the Pegasus business under ISI Systems in 2002. But within a year a deal was agreed to sell Pegasus to Technology Services Group (TSG), the software company established by Sage co-founder Graham Wylie.
Mr O’Hara today confesses mixed emotions as to whether it was the right call to sell to TSG at that time. But, after going on to build the TSG business in Scotland between 2004 and 2013, there came a parting of ways he diplomatically describes as the “end of our natural strategic involvement”. Then, after 16 months as director of finance and IT at the charity ENABLE Scotland, he formed Kick in 2015.
That Kick has been able to move quickly to acquire companies reflects the nimble-footedness Mr O’Hara now enjoys. He admits he had been frustrated at being unable to do deals quickly when he was not steering his own ship. Now, at Kick, targets are agreed by the board and quickly pursued.
“It’s just having the freedom to carry on the strategy that you believe in, as opposed to just being compromised,” Mr O’Hara said. “It makes it easier to follow the plan. In the past where you would want to do something, and for whatever reason it was blocked or there was a difference of opinion, that obviously gives a sense of irritation.”
And it seems it won’t be long until another acquisition is chalked up.
“We’re in due ‘dil’ with one at the minute,” Mr O’Hara said. “I can’t actually say who it is, because they would get very excited if I did. But we would hope to do that fairly soon.
“And we have parked another one, essentially because it would just be too difficult to do at the same time. But we will revisit that at some point.”
Indeed, the publicity generated by the Vorezo deal has led to direct approaches from other companies looking to discuss tie-ups.
“It seems very formal and very predatory, but we have got a list of targets that we would be looking to do something with,” said Mr O’Hara.
Such deals would not be proceeding had the order book not been bulging at Talon, of course. Talon generates most of its work from providing IT services.
Clients are small and medium-sized enterprises, though the biggest customer it has landed this year is the £40m turnover SSW. Its subsidiaries include Europasat, the satellite broadband provider.
Talon, which employs close to 40 staff, also has some pretty big clients in the public sector. These include the Mungo Foundation, which has around 800 employees, and ENABLE Scotland.
The Kick chief said he does not have an exit timeline in mind for now. His gaze is fixed firmly on growing Talon into the largest independent IT consultancy for SMEs in Scotland “within a short period of time”, with a move into England on the agenda for the long term.
“Beyond that, we then just look at other options in terms of how we continue to grow the business,” he said. “There are loads of opportunities here.”
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