|Deal completed in:||24 months|
A well-established IT support and hosting company, offering clients tailor-made outsourcing alternatives for all their IT management and technical support needs.
Founded in 1990 by four engineers whose ambition was to provide technical excellence and a strong focus on client service in the support of business IT systems, the company prided itself on its accreditations with major hardware and software vendors, excellent customer relations and numerous testimonials to its name.
The company was well located to service both London and Southern England, as well as other parts of the UK, through its national network of engineers.
The company had a turnover of £1.2m, with a gross profit of circa £550k. Circa 46% revenue.
Motivation to sell the company came after 26 years of having built a solid, successful and profitable company, with one of the vendors having some health issues, another wanting to retire and the remaining two considering exploring other interests.
The company, run by a dedicated, friendly and flexible team and able to satisfy a wide range of IT requirements, was a well-established business with a loyal customer base and a high proportion of long term support revenue, though with no service contracts in place.
To address this last point, it was agreed that on completion of the sale, three of the vendors would be happy to provide a full hand over to ensure the successful transfer of client loyalty to the buyer as well as offer a short to medium term exit plan to assist with the transition of the sale.
Whilst there were a number of customers spread across the UK, the majority of customers were in London and the South-East so there was obvious potential to achieve further growth into further geographic UK territories, as well as the offer of complimentary services to existing clients.
The acquisition offered an outstanding opportunity for another IT support, hosted services, technology or telecoms company looking for a strategic acquisition to add to their portfolio of clients and increase revenue and profit.
What Hornblower Did
We set about launching a comprehensive marketing campaign targeting buyers in the IT, hosted services and technology sectors. Following this, we engaged with the extensive network of buyers on our data base and from this we were able to shortlist potential buyers who had the means to make the acquisition.
Led by Louis Wheeler, our business sales and acquisitions consultant, we organised and chaired individual meetings between qualified buyers and the vendors as well as negotiating a particular deal structure which worked well for both the buyers and sellers.
The eventual buyer, which came from Hornblower’s database of active IT buyers saw the potential and ability to expand the business. After the retirement of the Finance Director, Louis worked with the Sales Director to ensure the key metrics of the company were presented to the buyer and was fit for the due diligence process. We proceeded in drawing up the Heads of Terms, giving the lawyers clear direction for the objectives of the deal and Louis continued to manage the transaction through to completion.
The transaction was completed in February 2018 with the sale of 100% of the shares with the proceeds divided between the 4 shareholders.
SOLD – February 2018