Enterprise Software and IT Support Business

Reference Number: HDA016

Location:

Turnover: £180k

Status: SOLD

Business overview

–      Outstanding opportunity to acquire a successful enterprise software development and support company based in the Home Counties, UK.

–      The business has achieves 67% net profit in the last year with a steady revenue over the last 3 years of which 80% is under contract.

–      The software product is well documented and so easily transferable to a new technical team.

–      Established in 1986, the business has developed an extremely loyal client base, with 30 customers all with annual support contracts, paid in advance.

–      The vast majority of current business is from the existing client base which includes household names in education, banking, commercial and local authority organisations worldwide.

–      Whilst there is scope to increase marketing activity, the business continues to attract new customers and has a good sales pipeline.

–      The business has a unique product and is currently sold at very competitive rates compared to the closest competitors.

–      This business would be of particular interest to other software development and IT support companies that are looking for a strategic acquisition to add to their portfolio.

Products and Services

–      The business offers support for installation and on-going use for two main industry-leading products

  • Enterprise job scheduling and control utility for networked UNIX, Linux and Windows server systems
  • Enterprise printer software application and print management solution for UNIX and Linux systems Hardware and software sales

Both products are open source and were developed by the business.

Employees:

–        1 directors (vendor) + 3 contractors

Premises:

–        The business operates from a home office.

Reason for sale:

–        The vendor is retirement age and wishes to exit the business and to relinquish responsibility to fulfil support contracts.

Financial overview

Year End: 30th September

2009-10

2010-11

2011-12

11 months to 31Aug 13
Mgt Accts

Sales revenue

£156,990

£153,078

£140,029

£181,010

Cost of Sales

£37,958

£82,268

£47,022

Gross Profit

£119,032

£70,810

£93,007

Percentage

76%

46%

66%

Adjusted EBITDA

£70,378

£13,452

£45,860

£121,211

Percentage

45%

9%

33%

67%

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

Synergy savings of £19k are possible through consolidation of the premises and other administrative costs. Based on the 2012-13 figures, this would enable the strategic buyer to achieve an EBITDA of £141k.

SOLD

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