IT Support and Consultancy Company SOLD
Business overview
– Outstanding opportunity to acquire a successful IT support consultancy, based in central London.
– The business has delivered steady growth over the past 4 years and achieves 20% net profit.
– Established in 2003, the business has developed an extremely loyal client base which is evenly spread with no one client representing more than 15% of the revenue.
– Over 90% of current business is from the existing client base which includes property, architectural, medical, marketing and fashion sector clients.
– 47% of revenue is generated from 32 clients who have IT support contracts and make regular monthly payments. 90% of revenue is generated by those customers on support contracts.
– The business has a well defined brand and unique service offering in what is a crowded market sector: focused on small businesses in a particular area of central London
– The business employs a team who can run the business day to day with minimal input from the vendors, who are focused on business development and sales.
– This business would be of particular interest to other IT support companies that are looking for a strategic acquisition to add to their portfolio. Significant synergy savings are possible for such buyers who already have a base in London/South East UK.
Products and Services
– The business offers IT support services on a business to business basis including:
- Support/maintenance contracts
- Managed services (including email hosting and back-up systems)
- Consultancy projects
- Hardware and software sales
– The company offers consultancy tailored for the SME market.
Employees
- 2 directors (vendors) + 1 office admin (part time) + 3 engineers
Premises
- The business operates from a leased office.
- Rent: £18,000 per year, Rates: £3,845 per year, Renewal: August 2011
Reason for sale
- The vendors wish to concentrate on other unrelated projects.
Financial overview
| YE: 31st March | 2006-07 | 2007-08 | 2008-09 | 2009-10 | 2010-11 |
| Sales revenue | £253,021 | £370,530 | £417,805 | £486,575 | £464,269 |
| Gross Profit | £103,319 | £140,284 | £170,092 | £163,990 | £167,743 |
| Percentage | 41% | 38% | 41% | 34% | 36% |
| Adjusted EBITDA | £20,400 | £58,839 | £90,519 | £94,314 | £94,716 |
| Percentage | 8% | 16% | 22% | 19% | 20% |
The adjusted EBITDA is stated after having paid the replacement cost of the vendors.
Significant synergy savings of £53k are possible through consolidation of the premises and other administrative costs. Based on the 2010-11 figures, this would enable the strategic buyer to achieve an EBITDA of £147k.