Listing ID: 77346
Business Overview
Confidential Information Memorandum (CIM) available upon receipt of our short online NDA – visit here: https://pronovapartners.com/engagement/scalable-tennessee-msp-with-elite-clients-for-sale/
The Company is an IT Services firm in a large Tennessee MSA with a strong bent toward managed services. The Company offers communications services, network services, cloud services, disaster recovery, and data center management. Over 80% of the Company’s clients are flat-fee managed services clients and this is the focus for all new business; approximately 20% of the clients are legacy clients that are ”break-fix”/project based. This small organization remains nimble by leveraging outsourcing whenever possible for things that are outside of core competencies, ie, for things like structured cabling and printer repair.
After 20 years of building the business through dramatic changes in technology and steady organic growth, the Seller is ready to retire and hand the reins of the business to a new owner who can leverage his success and take this establishment to the next level. All terms of such transition are negotiable, as the Seller’s desire is to facilitate a transition that is most beneficial to the Buyer.
Over the last 5 years, the Company has consistently gained a minimum of 5 clients a year and expects to serve more than 120 clients in the next 3 months. Retention rate is over 90%, creating more than $2 million in revenue.
The Company’s 21 largest client accounted for $1,216, 270.13 of revenue in 2020. Of this amount, approximately $744,342.15 was recurring monthly revenue and $472,107.98 was non-recurring or project-based.
The average tenure of the Top 21 clients is 10.14 years and the average revenue breakdown for such clients in 2020 was approximately $35,444.86/recurring and $22,481.33/non-recurring and/or project.
A detailed breakdown of the Top 21 Clients will be provided during due diligence and a comprehensive Confidential Information Memorandum (CIM) crafted by ProNova Partners is available upon receipt of a signed NDA ‘LINK ABOVE}.
Financial
- Asking Price: N/A
- Cash Flow: $828,627
- Gross Revenue: $2,444,102
- EBITDA: $828,627
- FF&E: N/A
- Inventory: N/A
- Inventory Included: N/A
- Established: 2000
Detailed Information
- Property Owned or Leased:N/A
- Property Included:N/A
- Building Square Footage:N/A
- Lot Size:N/A
- Total Number of Employees:6
- Furniture, Fixtures and Equipment:N/A
There is a 1500 Square Foot space leased from the Seller that would be made available to the new Owner at market rates, though leasing this space is neither required for purchase nor necessary for business continuity.
The Seller offers a transition and training period post sale on an as-needed or to-be-determined basis. While his ultimate desire is to retire from the Business, the Seller is willing to stay on short-term in a capacity most helpful to all parties. This period may be negotiated pre-sale of the Business.
After 20 years of building the business through dramatic changes in technology
There is, of course, plenty of competition in the IT and managed services space. The Seller reports a diverse competitive landscape that has not presented any extraordinary challenge to the Company’s success. The Company stays ahead of the competition by offering technical superiority, unparalleled service and a 24/7 response.
The outlook is blindingly bright for both the Company and any Buyer who acquires this industry leading Large Tennessee MSA located MSP. The Seller knows that the sales potential for the Company is far from being fully realized. The Company has many revenue streams from different verticals that all are profitable, but no marketing, advertising, or proactive hunting for business is currently underway. Seller believes that an investment in a good marketing/sales person and sales tools could double or better sales revenues in a short amount of time. The understanding of this explosive growth potential is factored into the Seller’s asking price and requested deal structure.
Additional Info
The business was established in 2000, making the business 22 years old.
Why is the Current Owner Selling The Business?
There are all kinds of reasons individuals choose to sell companies. Nonetheless, the true factor and the one they say to you might be 2 totally different things. As an example, they may claim "I have a lot of other responsibilities" or "I am retiring". For many sellers, these reasons are valid. However, for some, these might just be reasons to attempt to conceal the reality of altering demographics, increased competitors, current decrease in profits, or a range of various other factors. This is why it is really crucial that you not depend absolutely on a seller's word, yet rather, utilize the seller's answer along with your general due diligence. This will paint an extra sensible picture of the business's current circumstance.
Existing Debts and Future Obligations
If the existing entity is in debt, which lots of businesses are, then you will certainly have reason to consider this when valuating/preparing your deal. Numerous companies finance loans in order to cover points like supplies, payroll, accounts payable, and so on. Bear in mind that occasionally this can mean that profit margins are too thin. Lots of organisations fall into a revolving door of taking on debt as a way to pay back other loans. Along with debts, there may additionally be future obligations to think about. There might be an outstanding lease on tools or the building where the business resides. The business may have existing contracts with vendors that must be satisfied or may result in penalties if canceled early.
Understanding the Customer Base, Competition and Area Demographics
How do businesses in the location attract new consumers? Often times, companies have repeat customers, which create the core of their everyday revenues. Specific factors such as new competition sprouting up around the area, road building, and staff turnover can impact repeat clients and negatively affect future profits. One vital point to take into consideration is the location of the business. Is it in a highly trafficked shopping mall, or is it hidden from the main road? Certainly, the more people that see the business often, the higher the opportunity to develop a returning client base. A last thought is the general location demographics. Is the business located in a densely populated city, or is it situated on the outside border of town? Exactly how might the neighborhood typical family income effect future income prospects?
