Deal done:
Sale of IT Support & Solutions Company

Turnover:  £470k
Deal completed in:      3 months

The company

This small, long-established IT support services company served small to medium sized businesses and had over 150 support contracts in place, which generated over 40% of the total annual revenue.

The sale represented a strong opportunity for a similar business to bolt on these contracts to their existing infrastructure, or for a telecoms company wanting to move into IT support.

In the year to October 2014, the business generated revenues of £470k, with an adjusted EBITDA of £105k for a strategic trade buyer.

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The situation

The owners had no desire to build the business and wished to move in to project management roles without the responsibility of company ownership. One wanted to be considered for a continuing role within the business.

An IT support or telecoms company was most likely to have the necessary business infrastructure and marketing presence to be able to capitalise on the company’s past performance, whilst reducing existing overheads and increasing profitability.

What Hornblower did

We spent time producing a full Valuation Report and detailed Information Memorandum before launching the business to market, with particular focus on our IT database of buyers.

Within just 2 months, we had received over 80 enquiries had been received

We swiftly pinpointed six buyers who matched the valuation target and arranged meetings between them and the vendors.

A clear contender was identified and heads of terms agreed and drawn up. The transaction was completed just 3 months later.

The WIN-WIN

We secured a deal worth 4x EBITDA with 75% paid on completion and the remainder paid after 12 months. This deal both allowed the vendors to realise a significant windfall from the sale, and incentivised them to work with the buyers to provide a full hand-over to ensure the successful transfer of client loyalty. The buyer was able to grow their business by 150 contracted clients generating significant addition revenue and profits for their organisation.

SOLD  –  March 2015