IT Support and Consultancy Company SOLD

Reference Number: HB0126

Location:

Turnover: £464k

Status: 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.

SOLD

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