|Deal completed in:||4 months|
This well-established, fully managed IT and Telecoms company, specialised in broadband and cloud services. There were over 90 clients on 1-3 year contracts, predominantly from professional services sector.
The business’s projected revenue to July 2015 was £677k, with a projected EBITDA of £115k, up from £80k the previous year. In previous years, the business had barely broken even.
The company’s two directors were looking to radically change direction and wanted to sell the business in order to fund voluntary work, other non-competing business interests, and to travel.
This was a very streamlined regional business with limited technical resource, focused on a base of local clients. As such, we knew the appeal would be limited to a company who had a relatively local current infrastructure to which the business could be bolted on to.
Despite being a small business, the vendor was very experienced with a good strategic knowledge of the technology and telecoms sector.
What Hornblower did
After producing a full Valuation Report and detailed Information Memorandum, we targeted Midlands based companies and specifically Telecoms companies who were looking to diversify.
In less than 4 months, we had almost 100 enquiries.
We swiftly pinpointed four buyers who matched the valuation target and arranged meetings between them and the vendors.
Ultimately we engaged with a medium sized Telecoms company who were looking to grow aggressively and with an absolute commitment to diversify into managed services. The fit was perfect and being as this was their first managed services acquisition, they also offered the vendor a medium term consultancy contract with a view to helping them develop this side of their business.
We secured a deal worth over 4x the average EBITDA for the current and previous years with 56% paid on completion and the remainder paid after 12 months. This enabled the vendor to achieve the full value based on the current profitability whilst mitigating the risk for the buyer going forward.
SOLD – July 2015