Sale of IT Services and Support Company
The Company
An established IT support and managed services company, based in London with a particular bias towards clients in the private equity sector. The company's clients were based in and around the West End of London with the company providing a mix of consultancy and managed service contracts. With a total revenue of £2.0m, 60% of the company revenues were recurring through contracts.
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The Situation
Having co-founded the company in 2004, the vendors had steadily built their name and reputation in the private equity sector and had won new business in the last 10 years mainly by referral. They had also built a highly profitable business with EBITDA in excess of 20%.
One of the vendors was a little older than the other and wished to at least semi-retire, whereas the other partner was committed to staying with the business and trying to build it within the PE sector which they had never proactively attempted to do.
Due to this lack of proactive marketing and business development effort the business was well positioned to be taken on by a larger company with a strong culture of business development who would look to use the credentials of the business to win new contracts in the PE sector.
What Hornblower Did
A third of our company sales are of Information and Communications Technology companies. As a result, we are well connected to the serious players in this sector. We were able to engage with a highly acquisitive £100m+ turnover acquirer who was looking for bolt-on acquisitions in highly lucrative sectors. It was critical to the vendor who was planning to stay with the business that he was comfortable to work within the buyer’s business so he was highly selective in this regard.
The Win-Win result
Our clients accepted an offer from the large corporate entity who had recently made an acquisition of a larger company in the Private Equity sector which our client’s business could bolt straight into. The buyer has ambitious growth plans and this combined with the positive culture within the company made it a relatively easy decision for the Vendors to favour this particular buyer.
SOLD – March 2016
