We pledge to our Buyers to provide with the fitting business through our contacts in the IT industry.
If you are looking to expand your business inorganically, please call us.
Steps in Buying a business:
1. Meeting and Discuss
To understand your needs.
2. Signing Confidentiality Agreement
You will sign a confidentiality agreement to protect all involved.
3. Identifying the Right Business
We will start our process and bring you the right business.
4. Showing the Business
We will arrange to get you the information regarding the business you are interested and arrange for a meeting with the seller for you to clear your queries.
5. Offer or Letter of Intent
You will present the seller with your letter of intent.
6. Due Diligence
We will help you with the due diligence for you to understand the business your are buying and make the final offer and proceed to settlement.
The final phase of the purchase. We will advise the seller and you to engage your own attorneys and finalize the settlement.
FYI, this is sellers’ market in the IT Industry M&A. Since it got difficult to grow organically, there are many buyers in the market looking to grow in-organically thru acquisitions. Many are looking to close deals before end of this year.
Following deals happened recently:
East Coast Company – 37 consultants on billing. C2C + W2 Hourly. No VMS, direct clients include IBM (Commercial + Federal). Top Secret Clearance. Other direct clients include pharma and financial. Yearly Revenue $7M. Gross yearly margin $1.5M. Looking for 2X Gross Margin. Will provide 6 months guarantee for 90% of the GM. Seller will help Buyer to get US Gov't Facility Clearance.
"Sold for 2X Gross Margin."
West Coast Company – Asset Sale only - 51 consultants on billing with 58 projects. Tech Mahindra Vendor. All on TN Visas. .NET, Android, Java, iOS and Python consultants. Buyer will get to source from Canada and Mexico. Yearly Revenue around $7,7500,000. Gross yearly margin $1,700,000, on the 1st projects only. Looking for 2X yearly Gross Margin. Seller did not include the 2nd projects in the valuation. Will provide 3 months guarantee for the GM with 75% down payment. Balance paid in 6 months. Buyer must pay a fee.
"Sold for 2900 times hourly gross margin. 75% down at closing. 25% in 3 months."
East Coast Area Company – 164 candidates on billing. IT and Healthcare Staffing. 28 candidates on W2 and 136 on C2C. Many direct clients including Brillo, Deloitte, Servion, Pactera, Medefis, Adena, Sierra Healthcare and Samaritan Health Services. System Integrators including TCS, Happiest Minds, Persistent Systems and Ness USA. Established around 15 years. Strong back office in India. Total yearly revenue more than $20M. Yearly gross margin around $2.6M. Looking for 2 times annual gross margin as sale price. Will provide 9 months guarantee.
"Sold for 3200 times hourly gross margin. 70% down payment. Balance in 9 months."
Mid West Area Company – Asset Sales only. 10 candidates on billing. 9 on H-1B and one US Citizen. Yearly Revenue around $ $1,150,000.00. Gross hourly margin around $155. Looking for 3000 times of the hourly gross margin for all H-1B candidates and 2000 times hourly gross margin for the US Citizen candidate as sale price. 70% payment at closing and balance paid after 6 months. Will provide guarantee for 90% of the sold hourly margin. Buyer to pay the fee.
"Total 12 assets sold. 2500 times hourly gross margin for all H-1B candidates and 1500 times hourly gross margin for the other candidates. 100% payment at closing."
Project Management & Solutions & Managed Services Provider - Over 25 years in business. Servicing Insurance, IT, Energy, OEM, Automotive, Healthcare and Manufacturing industries. YOY growth more than 10% in past 3 years. Expertise in Project Management Office (PMO) Solutions, Managed Services, Project Management Consulting, Staff Augmentation and Agile Transformation. Practicing Consulting, Managed Services, Training and Software Tools. Doing business in USA, Europe, Canada, UK and Saudi Arabia. Clients include Caterpillar, Cummins, Ameren, American Axle & Manufacturing, Country Financial and Saudi Arabia Ministries. Around $6M revenue. Around $1M EBITA. Looking for 5 times multiple of EBITA as sale price. One of the partners willing to stay back as minority shareholder to continue grow the business. Recently renewed 3 years MSP agreement with a client worth around $9M.
"Sold for 4.3 times EBITA."
Eastern Area Company – 18 active contracts. With value of more than $18M thru next couple of years. Seller is a Prime Contractor on the Navy's Seaport E Contract ($37B value), Prime Contractor on GSA Multiple Award Schedule (MAS) and GSA 621i – Professional & Allied Healthcare Staffing Services, SBA 8(a) Certified MBE, DBE, Small Business, GSA 70 Cloud Services, CMMISVC Level 3, ISO 9001:2015 Certified, AWS Standard Consulting Partner firm in the Technology, Media, and Medical industry. Clients include U.S. Air Force, U.S. Army, Space & Naval Warfare Systems Command (U.S. Navy), Centers for Disease Control and Prevention (CDC), Defense Information Systems Agency, Department of Treasury, Department of Defense Education Activity, and Armed Forces Retirement Home. Premier Cloud Partner with Amazon on their AWS Partner Network. Waiting on the 8(a) STAR III – IDIQ GSA contract ($22B value). Annual gross revenue around $8,000,000. Current EBITA is around $1,000,000. Looking for 6 times EBITA as sale price. Seller is willing to stay and help in transition.
"Under contract for 5.5 times EBITA."
Assets acquired: Many sellers sold assets, due to PPP loan situation, in the batches of 5, 10, 20, 30, 40, 50 and 71. The H-1B candidates acquired for 2500 times hourly gross margin with no guarantee and 3200 times hourly gross margin with 6 months guarantee. OPT/CPT candidates acquired for 1700 times hourly gross margin with no guarantee and 2200 times hourly gross margin with 6 months guarantee. Where the direct clients involved the acquired price is around 25% higher.
The PPP loans are take care either in the agreement or by escrow.
VA Company – 57 consultants on billing. 46 C2C consultants. 11 consultants on W2. No H-1B. Primarily working for Cognizant, Infosys, L&T Infotech, NTT Data, Tech Mahindra, Fulcrum, Mphasis and Persistent Systems. Around $430,000 annual profit in full time placement. Total yearly Revenue around $8,320,000. Gross yearly margin around $1,350,000. Looking for $1.6M as sale price all paid at closing. Complete setup off-shore recruiting office and not much on-site overheads at all.
“Sold for $1.6M within couple of days. 100% paid at closing.”
FL Company – 31 consultants on billing. No H-1B. OPT/CPT/GC/Citizens. 11 consultants on offshore development in India. 4 Direct Clients with VMS and SOW. Coca Cola, Pearson, GDIT, Medefis, etc. IT, Healthcare and Light Industrial placements. Total yearly Revenue around $2,000,000. Gross hourly margin around $260. Looking for 4000 times gross hourly gross margin or Best Offer. 50% down payment. Balance paid in 18 months. Will provide 90% guarantee for the gross margin.
“Seller partnered with the Buyer for long term benefits.”
TX Company – 35 consultants on billing. 11 H-1Bs and 24 TNs. H-1B filed for all TNs in 2020 quota. Labor filed or initiated for all. All long-term assignment. Well established company. Total yearly Revenue around $6,050,000. Gross yearly margin around $1,340,000. Looking for 1.11 times annual gross margin as sale price 100% paid at closing. Actual sale price $2,130,116.
“Sold at asking price.”
East Coast Company – 2 consultants on billing. No H-1B. Asset Sale only. Yearly Revenue $260,000. Gross yearly margin $124,000. Looking for 1X Gross Margin. Will provide 15 months guarantee for the GM with 70% down payment. Buyer to pay $2000 per candidate as fee.
Consultant – 1: Android Developer, US Citizen. Client: Comcast, Bill Rate: 60/hr, Pay Rate: 30/hr on 1099. GM - 30/hr
“Sold for 2000 times hourly gross margin. 60% down. Balance in 15 months.”
TX Company – Asset Sales only. 2 candidates on billing. Both on H-1B. Yearly Revenue around $ $350,000.00. Gross yearly margin around $42,000. Sale price $55,000. 100% payment at closing.
“Sold for $50,000. 100% paid at closing.”
VA Area Company – 60 consultants on billing. 39 on H-1Bs, 20 on OPT/CPT. 5 consultants on bench. All good Tier 1 Clients. Client include TEKSystems, E-solutions, UST Global, IDC Technologies, MindTree, INT Technologies, ALTEK, Jade, Diversant, Enable, Artech and TechMahindra. Yearly Revenue around $7,700,000. Gross yearly margin around $1,600,000. Looking for onetime payment.
“Sold for $1.6M, all paid at 100%.”
19032024 – TX Company – Asset Sales only. 1 candidate on billing. H-1B with Java. Yearly Revenue around $ $130,000.00. Gross yearly margin around $28,700. Sale price 1 times annual gross margin. 100% payment at closing.
“Sold for $28,700. Paid 50% at closing. Balance in 90 days.”
24031410 – NJ Company – 9 consultants on billing. Total yearly Revenue around $1,000,000. Gross yearly margin around $425,000. Looking for 1.1 times the annual gross margin as sale price. Will provide 6 months guarantee for 90% of the hourly gross margin.
“Sold for 1000 times hourly gross margin. 100% paid at closing.”
We pledge to our Sellers to sell their business quickly and to get the best market rate possible.
For any reason, if you have decided to sell your business, we are here to help you. Please contact us.
Steps in selling your business:
1. Meeting and
To understand your requirements including your expectation and payment terms.
2. Collect Data
We will ask for your business information to come up with the valuation.
3. Value the Business
By checking the industry across the nation at that time, we will come up with the value for your business.
4. List the Business
Once we sign the Listing/Sale Agreement, we will start the marketing.
5. Market your Business
We will reach out to our vast buyers in the market.
6. Interview Prospective Buyers
We will pre-qualify the buyers to save your most valuable time.
7. Showing the Business
With your approval, we will present your business information to the buyer, after they sign the Confidentiality Agreement. Also, we will arrange for your meeting with the buyer.
8. Offer or Letter of Intent
We will get the letter of intent from the buyer.
9. Due Diligence
You have to gather the past 3-5 years of financial data including Tax Returns, P&Ls, and Balance Sheets. We will also need copies of your current agreements for the due diligence
The final phase of the purchase. We will advise the buyer and you to engage your own attorneys and finalize the settlement.
Clients looking for IT Companies:
Following are some of the clients who are looking to acquire US IT companies:
1. South East US Client with more than $500M in revenue is looking for IT Solutions Company with more than $20M in revenue
2. NC client, currently around $500M in revenue, with plans to go public in the next 3 years, is looking for IT companies with 30+ employees. This client will work with the seller, if the seller is interested in continue to run the business.
3. Clients is looking for Healthcare Staffing companies.
4. Client is looking for no-cost roll up. This will give any seller 25% or more valuation if sold separately. The seller will have 100% control over the company and sold to the end buyer.
5. Client trading in NY Stock Exchange is looking for any size company at a valuation of 4000 times hourly gross margin
6. Many clients are looking to add more value to their companies in this environment by acquiring any size company or any number of assets. They are willing to provide good valuation.
7. For companies with focus on AI, ML, Robotics, ServiceNow, SalesForce or any specific skills there are many interested clients. Same for any specific domain.
8. Client is looking for a company with direct vendorship to FedEx or UPS or Delta Airlines.
9. Clients are looking for companies with vendorship to direct clients or Tier 1 vendors.
10. Buyers are acquiring any number of assets.
11. Buyers are looking for companies with any Government Contract vehicle.
12. Human Capital Management Companies (HCM) are looking to help in Payroll funding and management.