Sale of IT Support & Managed Services Provider
The Company
Selling IT companies typically generates high levels of interest, requiring a focused approach in targeting and selecting potential buyers. We were fully aware of this requirement from the outset of receiving the mandate to sell Objective Technologies Ltd, a fully managed IT support specialist with an established SME customer base.
Based in Hampshire, Objective Technologies had a solid trading record and over 30 years combined IT experience in a wide range of industries including, Children’s Social Care, Specialist Education, Manufacturing, Retail and Distribution.
The company had developed a strong niche in the rapidly growing Children’s Social Care sector and attained an in-depth knowledge of the demands of this sector. Renowned for leading with a personal approach towards each of its clients, Objective Technologies maintained profitable, high quality client relationships over the long-term, facilitating the growth of its clients’ businesses with the provision of adaptable and specific IT solutions.
The company’s comprehensive range of services included both IT support and maintenance and consultancy and project management. The monthly recurring revenue for support and maintenance totalled 48% of total revenue.
Objective Technologies demonstrated a robust financial record, with a 5-year trend of increased turnover and profitability and a strong performance sustained throughout the challenges of the Covid 19 pandemic.
With the advantage of a number of clearly identified growth opportunities - the business was presented to market in a strong position to expand its sales and business development and grow with the team that had been put in place.
The Sale Process
We placed Objective Technologies on the market in October 2021 with an IM and additional information, giving buyers enough information to provide an indicative bid. As anticipated, the company drew a great deal of attention, attracting over 120 interested parties.
This level of interest needed to be handled carefully as Objective Technologies mainly operates in the care sector and the vendor was aware that the marketing process needed to be handled with confidentially as a key consideration. Confidentiality is always of utmost importance, and we managed this aspect of the process by making it clear to interested buyers that they would receive the IM only on approval by the vendor.
Our process also included requesting indicative offers and deal structure, prior to meetings taking place. Whilst we understand that interested parties like to speak with the vendors before making an offer, even if indicative, the sheer number of potential buyers requesting meetings or calls, would take up too much of the vendor’s time.
Using our approach of careful filtering and selection, the list was eventually whittled down to four buyers being put through for discussions with the vendor. From these the preferred bidder was chosen, and the Heads of Terms was signed within 2 months of our approaching the market.
The Outcome
The deal was carried out entirely online, via Teams. The intervening Christmas break however delivered a setback, causing a delay in the deal at the due diligence stage. On return from the Christmas break, the Buyer who had progressed to the later stages of due diligence, decided that the company was too reliant on one sector and retracted their bid.
As we already had three further qualified buyers lined up, we decided along with our client not to remarket the business at this point and approached the next preferred bidder. The buyer was delighted to have been contacted and we were able to negotiate similarly good terms for sale.
The deal successfully completed in July 2022 and as part of the agreement between the parties, the vendor will work as a consultant for the company for the first year.
The deal was managed by our London based M&A broker, Derick Humphrey. Derick manages business sales for Hornblower across London and Southern UK.
SOLD – July 2022
