Deal done:
Sale of a Provider of Fully Managed IT Support and Hosted / Cloud Services

Turnover:  £1.3m
Deal completed in:      7 months

The Company

A highly successful provider of fully managed IT support and hosted/cloud services, based in London with an overseas office and support desk in South Africa; the company had global clients across the UK, Europe, Africa, Asia and the US.

Through its well-defined brand, the company offered a comprehensive range of IT services to over 40 clients from a variety of sectors. At the time of sale, the business supported a total of over 120 servers and 700 PCs/MACs; with many customers on 3-year managed-services contracts.

The turnover was £1.33m with an adjusted EBITDA of £434k (33%).

Click here for full Business Summary

 

The Situation

The two Directors (vendors) headed up a staff of 40. In recent years, they had structured the business to allow themselves to operate as Account Managers; enabling the second-tier management team to run the business day to day.

The vendors had established a solid platform for growth and indeed were achieving significant growth but believed  they had taken the business as far as they could. They felt confident that there would be significant opportunities for a UK-based acquirer to realise substantial cost savings by migrating further IT-support-desk and back-office work to the overseas office. Secondly, they believed that there was huge potential to grow the Business Process Management (BPM) side of the business and to win further international contracts.

The vendors expected to exit the business following a handover, to pursue other non-competing interests, but were open to remaining in the medium term if this suited the acquirer.

 

What Hornblower Did

In addition to targeting our large database of potential buyers in appropriate sectors, we targeted companies that had multi-national offices; specifically, those that had a foothold in South Africa.

After just 2 months, we had achieved over 80 enquiries and commenced a process of conference calls for those who we had means-tested for appropriate levels of funding. We then arranged meetings between the vendors and 4 potential acquirers, to determine the best fit.

Mark Sykes, our International Mergers & Acquisitions Director, initiated the sale with the client.  Mark assessed the buyers’ suitability and funding arrangements, and negotiated final offers on our client’s behalf.

In addition, Mark created the ‘Heads of Terms’ agreement and managed the transaction process through to its successful completion.

A sale of 100% of the shares was agreed. Both vendors ultimately decided to stay with the acquiring company and were offered share incentives to grow the business and achieve a second exit further down the line.

SOLD – June 2017