IT Support Services Business for Sale – Bolt-on Opportunity

Reference Number: HGS014

Location: North West England

Turnover: £130k

Status: SOLD

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Business overview

  • Opportunity to acquire an IT support business, based in the north west of England.
  • In the 12 months to 31st October 2015, the business achieved 25% adjusted EBITDA on a total revenue of £113k.
  • The business has a strong client base which is geographically spread across Manchester and the north west of England.
  • The business has annual contracts with 52 clients for IT Support services. These client contracts are for a minimum of 12 months and are on a rolling basis thereafter with 90 days’ notice required – many have been with the organisation for 3–5 years.
  • The total recurring revenue to the business from both IT support and managed services is £50k per annum (44%) with the remaining £63k (56%) accounted for hardware and software sales and ad hoc projects.
  • The contracted clients account for over 93% of the total income from additional hardware, software and ad hoc project sales above their service contracts.
  • The business was set up in 2010 and has traded well for the last 5 years.
  • The business primarily services small businesses in the North West with between 5 and 50 users. Most of the work is completed remotely but occasionally client-site visits are required.
  • The business currently employs one member of technical staff to run the day to day support activities plus the vendor/director. The vendor works part-time due to other commitments.
  • This business would be of particular interest to other IT support companies that are looking for a ‘bolt-on’ business that brings a substantial number of additional contracts to their books, or a telecoms company looking to move into IT support.

Products and Services

The business offers traditional IT support services including:

  • IT Support/maintenance contracts.
  • Managed services (including email and web hosting and back-up systems).
  • Consultancy and hardware and software sales.

Employees

  • One full-time technical engineer, in addition to the vendor who works part-time.

Premises

The offices are leasehold.

  • Size: 18.92 sq. m., plus an allocated car park space.
  • Rent: £400 per month.
  • Rates: £116 per annum .

Reason for sale

  • The owner is retraining to be a mental health professional and to make some other lifestyle changes.

Financial overview

Forecast
Year ending 31st Oct2013 2014 2015 2016
Sales revenue£46,991£77,472£112,804£130,000
Gross profit£29,371£40,768£60,972£70,200
Percentage63%53%54%54%
Adjusted EBITDA£19,411£15,636£28,630£35,782
Percentage41%20%25%28%
SOLD

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