THE DIVESTMENT CAMPAIGN

Our Client – The Vendor

Based in Western Sydney, Pumpseal Sales is a longstanding wholesale distribution business that specialises in the sales and service of industrial pumps, related equipment, and wear parts. Representing a range of leading global equipment vendors, the Business’s product offering spans motorised pump sets, bare shaft pumps, air powered diaphragm pumps, lubrication pumps, centrifugal pumps, rotary gear pumps, helical rotor pumps, magnetic drive pumps, metering and dosing pumps as well as professional-grade hose, cord, and cable reels. Complementing this, Pumpseal provides customers with independent solutions for purchasing and specifying new pumps in addition to aftersales support delivered via in-house workshop facilities &/or on-site troubleshooting.   

In 2022, after many decades of leadership, Pumpseal’s second generation directors decided it was time to exit the Business and enter the retirement phase of their lives. They engaged Johnsons Corporate to undertake a national sales campaign, which was tailored to offer Pumpseal’s revenues, customers, and suppliers as a synergistic bolt-on to an established trade buyer within the broader industry. 

The National Sales Strategy

A well-known brand within its industry, having operated since 1969, Pumpseal represented an attractive opportunity for prospective purchasers to broaden or complement their existing offerings. It delivered turnover c. $6.0M+ and consistent gross margins. Pumpseal offered buyers the potential to create new revenue streams by leveraging its strong market position and long-standing supply relationships. Alternatively, an interstate operator could attain instant market share in NSW. Finally, it offered the opportunity to cross-sell complementary products &/or services to the loyal base of industrial customers.

Johnsons Corporate’s custom research & marketing focused on Australian import/distributors of industrial pumps as primary targets. Then, to maximise the pool of potential acquirers, secondary research made a comprehensive sweep of related sectors where an acquisition would present an opportunity for complementary diversification. Johnsons ran a proactive direct marketing campaign that uncovered 41 qualified, interested parties and secured Offer & Acceptance 16 weeks after going to market.

(Read more about how using a Specialised Mid-Market Business Broker Approach to selling your business could get you a better outcome – just like our client).

The Related Trade Buyer

Headquartered in Victoria and operating nationally, Pump Engineers has long specialised in the supply and installation of niche industrial pumping equipment. This acquisition served as the basis for a larger footprint in NSW, whilst also extending the company’s portfolio of leading equipment brands.

THE DIVESTMENT CAMPAIGN

Our Client – The Vendor

Founded in 1995, Triox is a manufacturer-supplier of advanced pesticides, formulated for application in agricultural and/or home & garden settings. Primarily focusing on the control of snails & slugs, rodents, and invasive weeds, the Business develops and produces its own branded product lines, which it wholesales to major ag-supplies distributors as well as national home & garden retailers. In addition, Triox provides contract manufacturing services to the broader pesticide market. Using proprietary IP, it toll manufactures on behalf of major brand-owners and has also developed private label products for national distributors. With its own purpose-built factory, the Business operates as the only high-volume producer of pelletised baits on Australia’s eastern seaboard. It is further differentiated by the effectiveness of its goods, the depth of its technical expertise, and the highly personalised service it offers.

In 2022, Triox’s three long-standing directors decided it was time to seek a new owner for the Business as a step towards their eventual exit to retirement. They engaged Johnsons Corporate to undertake a national sales campaign on their behalf, with the objective of finding a trade buyer whose positioning and capabilities would allow them to continue servicing Triox’s mixed customer-base. Representing commercial and consumer end-markets, blue-chip clients include pesticide brand-owners, major suppliers, and national retailers in both the agriculture and home & garden spaces.

The National Sales Strategy

As an acquisition opportunity, the Business boasted a number of features that would make it attractive to strategic acquirers. Beyond a long history of consistent revenue growth, these included proprietary product and manufacturing IP, high-volume manufacturing capabilities, and a portfolio of established in-house brands.

Johnsons Corporate’s custom research & marketing targeted the Australian markets, with a focus on companies operating in pesticide manufacturing as well as in the contract manufacturing of industrial chemicals. In addition, Johnsons commissioned secondary research into adjacent sectors including pesticide distributors, chemical suppliers, and the manufacturers of related products, e.g. fertiliser. Johnsons’ proactive direct marketing campaign uncovered a wide range of interested parties from across the different research segments. It elicited almost 40 expressions of interest. Further vetting and negotiations resulted in the selection of a preferred buyer, with Offer and Acceptance secured within 16 weeks of going to market.

(Read more about how using a Specialised Mid-Market Business Broker Approach to selling your business could get you a better outcome – just like our client).

The ASX-Listed Buyer

DGL Group is a market leader in chemical formulation and contract manufacturing as well as in related warehousing and distribution, waste management, and environmental solutions. This acquisition provided the company with a platform for further growth into the agricultural sector, boosting its manufacturing capabilities and market reach. 

THE DIVESTMENT CAMPAIGN

Our Client – The Vendor

Integrated Technical Software (“ITS”) is the company behind SPACE GASS – Australia’s leading software solution for structural engineers. The core application along with an ever-growing selection of extension modules allows for the multipurpose 3D analysis & design of structures such as bridges, dams, buildings, stadiums, aircraft hangars, mining & industrial infrastructure, membrane structures, towers, tanks, and more. A modular licensing model makes the product accessible to all types of users, with customers ranging from large multinational engineering firms to boutique engineering consultants to government authorities. Since its launch in 1983, SPACE GASS has become the tool of choice for Australian engineers – owing to its purpose-designed capabilities, user-friendly interface, and the regular release of upgrades and new functionality. Over the years, the Business has successfully evolved into a highly profitable concern with a long history of consistent performance including long-tail recurring revenue streams. 

After 35+ years building the Business, ITS’s director sought to enter semi-retirement. He appointed Johnsons Corporate to undertake an international divestment campaign with the aim of finding a strategic acquirer willing to setup a succession strategy and with the means and capabilities to ensure continued growth and success for the organisation.

The International Business Sales Strategy

As the vendor of a leading software brand in a highly specialised industry vertical, ITS represented a very attractive opportunity for trade buyers and financial investors alike. Acquisition highlights included a long-standing customer-base, subscription-based revenues, and consistently healthy margins – all backed by a long-serving and highly skilled technical team. Further-more future growth potential was enhanced by a market-ready portfolio of SG packages adapted for use in overseas markets.

Johnsons Corporate’s custom research & marketing targeted both the Australian and international markets, with a focus on related software businesses as well as the vendors of construction software and other types of engineering applications. In addition, Johnsons commissioned secondary research into the global PE sector to identify firms whose investment parameters spanned the B2B software sector. Johnsons’ proactive direct marketing campaign uncovered a wide range of interested parties from across the different research segments. It elicited almost 40 expressions of interest and a high number of indicative offers. Further vetting and negotiations resulted in the selection of a preferred buyer, with Offer and Acceptance secured within 12 weeks of going to market.

(Read more about how using a Specialised Mid-Market Business Broker Approach to selling your business could get you a better outcome – just like our client).

The International Buyer

Sweden-headquartered StruSoft markets a range of specialised software used across the broader building & construction sector for structural analysis, design, 3D modelling, collaboration, and energy. It is a fast-growing multinational enterprise boasting users in 40+ countries and with an expanding network of localised operations. The purchase of ITS and the highly complementary SPACE GASS package marks Strusoft’s formal entry into the Australian market and its first footstep into the AsiaPacific region

THE ACQUISITION PROGRAM

Our Client – The Buyer

Canon Business Services ANZ (“CBS”) is a market leader in the provision of digital transformation, business process optimisation, cloud technology, and secure IT managed services. This specialised entity was formally launched in 2019 by Canon Australia after its acquisition of Harbour IT and via a merger with the previously acquired NZ-based Converga. Headquartered in NSW, CBS employs over 1,700 people across ANZ and in the Philippines, with a primary focus on merging people, process, and technology to optimise customer operations.

In 2021, having bedded down the merger of its two foundation businesses, CBS launched a strategic growth program, centred on providing customers with complementary/adjacent solutions to CBS’s core infrastructure-as-a-service (“IAAS”) capabilities. In order to bolster inhouse resources, the CEO and board opted to seek external advisors to facilitate their M&A efforts. They engaged Johnsons to provide hands-on practical assistance – spanning the identification and qualification of suitable targets; the management of terms negotiations and price expectations; and the oversight of the due diligence and legal processes involving the exchange of information between multiple stakeholders

The Acquisition Strategy

As an initial step Johnsons worked closely with CBS’s leadership team to design a clear acquisition brief. It would target IT services providers operating in Australia and/or New Zealand. Other critical investment criteria included a proven Microsoft Azure offering, an established customer-base of SME &/or government organisations, strong annuity revenues, and an experienced team of technical staff.

With a mandate to focus on  MS Azure and cyber security services, Johnsons’ research focused on Australian & New Zealand providers whose offerings would dovetail with CBS’s strong IAAS capabilities. Johnsons then ran a proactive direct marketing campaign that uncovered 19 qualified, off-market acquisition targets. Further vetting and negotiations with a shortlist of preferred targets resulted in the execution of an Agreed Terms Sheet between the buyer and its top-rated target.

(Read more about how using a Specialised Mid-Market Business Broker Approach to growing your business through acquisitions could get you a better outcome – just like our client).

The Acquired Target

WA-based Satalyst is a Gold Microsoft Partner that specialises in cloud, security, and data services. The acquisition strengthened CBS’s application, security, data and AI capabilities, while providing Satalyst with the necessary backing to fast-track its own expansion plans.  

THE ACQUISITION PROGRAM

Our Client – The Buyer

Headquartered in NSW, ASI Solutions is a leading IT managed services provider that services commercial customers across Australia’s eastern seaboard. Over its 35+ years of operation, the Business has worked with a wide range of both private and public sector organisations. It focuses on providing holistic technology solutions – from hardware and software procurement to complete managed services – that harness innovation and advanced technology to streamline organisational processes and transform capabilities. Turning over more than $160M, ASI is a highly entrepreneurial business and was named the #1 Fastest Growing Private Australian Company in 2020 by IBISWorld.

Supplementing strong organic growth, the Business’s directors strategically use acquisitions as a means of accelerating diversification and with the goal of cementing ASI’s position as one of Australia’s leading national IT Services Providers. In 2019, they completed the purchases of Canberra-based Forward IT and New Zealand-based BEarena. Then in late 2020, to bolster their in-house resources, ASI’s directors sought external advisors to facilitate their M&A efforts going forward. They engaged Johnsons to provide hands-on practical assistance – spanning the identification and qualification of suitable targets; the management of terms negotiations and price expectations; and overseeing the due diligence and legal processes involving the exchange of information between multiple stakeholders.

The Acquisition Strategy

Johnsons worked with ASI to design a clear acquisition brief that would target IT product & services businesses operating in Australia and/or New Zealand with revenues up to $25M. Other investment criteria included an established offering in IT services, managed services, and/or hardware sales; a portfolio of B2B customers; and an experienced team of technical staff.

Custom research spanned a number of sectors complementary to ASI’s areas of strategic focus – including IT Managed Services, hardware distribution, audiovisual solutions, and unified communications. Johnsons then ran a proactive direct marketing campaign that uncovered 33 qualified, off-market acquisition targets. Further vetting and negotiations with a shortlist of preferred targets resulted in the execution of an Agreed Terms Sheet between the buyer and its top-rated target.

(Read more about how using a Specialised Mid-Market Business Broker Approach to growing your business through acquisitions could get you a better outcome – just like our client).

The Acquired Target

From its base in the regional city of Mildura, Int Tec Solutions provides IT support services to businesses across northeast Victoria. Its offering combines the latest technology with skilled IT experts and results in increased efficiency, reduced costs, and more vigorous security for its customers. For Int Tec, this was an opportunity to establish a succession strategy for its original owners.