IT Support and Consultancy Company SOLD

Business overview

–        Outstanding opportunity to acquire a highly successful IT support and solutions provider, based in Nottingham.

–        The business has delivered steady growth over the past 4 years with YOY growth of 33% to May 2011.

–        Gross Profit margins are increasing significantly due to the consistent take on of new support clients and an increasing volume of project work. Gross Profit in the year to May 2011 was 52% and is now 62% year to date.

–        The business achieved a 25% net profit in the year to May 2011.

–        Established in 2002, the business has developed an extremely loyal client base of over 95 clients with no one client representing more than 15% of the revenue.

–        The client base is evenly spread and includes law firms, accountants, medical/pharmacy, estate agents, design & media, publishing, marketing and fashion sector clients.

–        30% of current revenue (c.£20,000 per month) is generated from 55 clients who have IT support contracts and make regular monthly payments. Support contracts are annual rolling contracts. The business is currently taking on an average of 3 new support clients a month.

–        The business has a well defined brand and highly regarded service offering. It is one of the only companies in the Midlands with Microsoft Gold accreditation for Virtualization and has an integrated partnership with Microsoft working on joint business development activity for Virtualization and Cloud based solutions.

–        The company has recently undertaken a change programme to strengthen all of the core business processes to enable and sustain aggressive growth.

–        The business employs a team who can run the business day to day with minimal input from the vendors which is now restricted only to project work. There is a head of department for each key business function and a natural successor to step up and lead the business if this appointment was not going to be made by the buyer.

–        The business has a highly regarded website and is extremely high on Google search rankings.

–        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 the Midlands.

Products and Services

–        The business offers IT support services on a business to business basis including:

• Support/maintenance contracts
• Consultancy/Network re-engineering projects
• Managed services (including email hosting and back-up systems) & bespoke cloud offering
• Hardware and software sales

Employees:

-        2 directors (vendors) + 1 Business Development Director, 1 Helpdesk Manager, 1 Senior Field Engineer, 1 Senior Systems (internal) Engineer, 1 Telesales operative, 1 Office admin/accounts manager

Premises:

-        The business operates from a 3900 sq ft leased office.

-        Rent: £17,500 per year, Rates: £9,740 per year, Renewal: June 2020

Reason for sale:

-        The vendors wish to concentrate on other unrelated projects.

Financial overview

The adjusted EBITDA is stated after including the replacement cost of the vendors.

Further potential synergy savings of £38k (and a projected £48k for 2011-12) are possible through consolidation of the premises and other administrative costs. These further adjustments would give rise to an adjusted EBITDA of £231k in 2010-11 and £353k in 2011-12).

SOLD