THE DIVESTMENT CAMPAIGN

Our Client

Based in Melbourne, BusinessWorks is an IT services provider focused on the SME segment in its regional marketplace. The Business offers a mix of high value-add services centred around a core Managed Services offering. Those subscription based services are complimented by stand-alone Solutions Services – the project-based consulting, design & deployment of small business IT solutions using today’s leading-edge technologies – as well as On-Demand Support Services, which comprise ad-hoc fee-for-service jobs completed through full-service in-house workshop. BusinessWorks’s one-stop offering and high service levels differentiate it from competitors in a highly fragmented market.

The effectiveness of BusinesWorks’s business model is reflected in its long-tenured customer-base and also in the consistency of revenue growth and profitability achieved over the five financial years through FY17. In 2017, having established and grown the Business for +20 years, BusinessWorks’s owner sought to exit in order to focus more of his energy and resources towards personal interests and eventual retirement. As a specialist mid-market business broker, Johnsons was engaged to manage a divestment campaign targeting strategic buyers, who would be prepared to continue servicing the Business’s clients while retaining its loyal staff.

The Business Sales Strategy

As an acquisition, BusinessWorks presented an attractive bolt-on opportunity for another business and featured an established customer-base delivering recurring revenues and strong gross margins. Looking forward, the Business anticipates continued strong uptake of its managed services offering, being well-positioned in the context of strong demand drivers projected for the IT infrastructure and managed services sectors and as regards broader industry & technology trends.

Johnsons Corporate’s custom research & marketing focused on commercial enterprises in the Australia’s IT Services sector as a primary market and also covered a number of other related technology services & product supply sectors. Johnsons ran a proactive direct marketing campaign that uncovered +30 qualified, interested parties. Further vetting and negotiations resulted in the selection of a preferred buyer as well as a backup buyer, with Offer and Acceptance secured within 14 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 Related Trade Buyer

Based in NSW, the acquirer, Hal Group, is a complete IT services company that offers a wide range of solutions to the SME, corporate and government sectors. The acquisition presented an opportunity to extend its geographic reach to include Victoria as well as to expand its managed services offering.

THE ACQUISITION PROGRAM

Our Client – The Buyer

Lanier (Australia) Pty Ltd is a leading provider of document management solutions and technology-based services to the SME and Corporate markets in Australia and overseas. The Business is a wholly-owned subsidiary of Japan-based Ricoh Company Ltd, a global provider of electronic imaging solutions. Lanier Australia employs more than 165 staff with headquarters in Port Melbourne, Victoria. The Business operates through offices in every major capital city and an extensive national dealer network, altogether generating annual turnover of circa AUD $100M. www.lanier.com.au.

Ricoh forwarded a directive to Lanier to diversify its offering into IT Services. The parent company was responding to changing market conditions, which saw the accelerating merger and development of new technologies drive growth in customer demand for support services. Lanier decided to implement this strategy via the purchase of a suitable business that would enable it to quickly establish a National IT Services division. Lanier engaged Johnsons Corporate as specialist Australian mid-market business brokers to execute a national Acquisitions Campaign on its behalf.

The Acquisition Strategy

Some of the attributes Lanier sought in a target included: a comprehensive B2B IT Services offering, including networked solutions and remote support; revenues between $5 million to $20 million; an appropriately skilled team of engineers; key senior management in place, and; a national footprint including all major cities.

Johnsons’ proprietary research focused on the IT Managed Services sector, identifying businesses along the East Coast of Australia with revenues of $5M to $15M and management in place. Johnsons ran a proactive direct marketing campaign that within 6 weeks resulted in a shortlist of 6 qualified, off-market acquisition targets. Further vetting and negotiations with these parties resulted in the execution of an Agreed Terms Sheet between the buyer and its preferred 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

Inspire IT Pty Ltd, a leading provider of IT Managed Services and IT Infrastructure solutions servicing customers in all major cities across Australia, was acquired and incorporated into Lanier to form the new Lanier IT Services division.