Information Technology Industry Mergers & Acquisitions!

BUYERS

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. 
7. 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:

 

01222201 – East Coast Area Company – 52 active projects. 41 on H-1B. Most with I-140. Clients include Capgemini, CNSI, Pro Energy Services, TrustedQA, Applied Insights, CAI, Hexaware, YAI, TekSystems and Persistent. Annual revenue is more than $8M. Hourly gross margin is around $534. Looking for 3400 times hourly gross margin. 60% down payment and balance paid in 6 months. Will provide 90% guarantee. Business comes with AR and AP to help the buyer with the working capital. Buyer must pay the fee.  

 

"Sold for 3500 times hourly gross margin."

 

09192201 – 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.

 

“Lost TCS. Sold for 3200 times hourly gross margin.”

 

01160912 – 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.”

 

01200301 – Bay Area 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.”

 

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. 3 months payment and guarantee.”

 

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.”

 

SAP NS2 Premier Partner. Around 300 candidates on billing. Multiple offices in USA. Providing SAP Federal, SAP Public Sector and Utilities, SAP Commercial, Telecom and Product Development & Professional Services. Top Secret Clearance. Many Federal Clients including Army, Navy, USDA, DLA, Department of Energy and AESIP. Other clients include Lockheed Martin, Northrop Grumman, Boeing, Verizon, Avaya, CBRE and State of Mississippi. Around $70M revenue with around $8M EBITDA. Seller is looking for 8 times EBITDA. 70% down payment.

 

“Sold for around 6 times EBITDA.”

 

20200701 – East Coast Area Company – Asset Sale only. 30 candidates on billing. 2 on bench. 26 on H-1B. 2 on OPT and 4 on CPT. Skills include Java, C++, AEM, RSA Archer and others. Gross yearly revenue around $3,700,000. Gross hourly margin around $320. Looking for 3000 times hourly gross margin as sale price. Will provide 6 months 90% guarantee. 50% paid at closing and balance in 6 monthly payments.

 

“Sold 24 assets for 3000 times hourly gross margin as sale price. 60% paid at closing. Balance will be paid after 6 months with 90% guarantee.”

 

19222325 – WY 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.”

 

22080301 – Bay Area Company – 38 consultants on billing. 19 W2s and all others on C2C. 9 on H-1B and others are TNs, USCs, GCs and EADs. Direct Clients include Google, HP, Equinix, Western Digital, Sonicwall and WePlus. Yearly Revenue around $4,150,000. Gross hourly margin around $505. Looking for 4000 times hourly gross margin as sale price. 75% down payment and 25% after 6 months. 90% guarantee.

 

“Sold for 4000 times of the hourly gross margin. 50% down payment.”

 

Midwest Company – 105 W2 Employees. 5 C2C. 120 projects. 50+ candidates on bench. 80% on H-1B. 70% of candidates on Full Stack Java and UI developers. Tier 1 vendors like TekSystems, Modis, kForce and IDC. Gross annual revenue $15M. Gross hourly margin $1250.  Looking for 3200 times hourly gross margin.  70% down at closing. Balance paid in 6 months. 90% guarantee.

 

“Sold for 3200 times of the hourly gross margin.”

 

03062024 – TX Company – Asset Sales only. 7 candidates on billing. All on OPT. Yearly Revenue around $ $900,000.00. Gross hourly margin around $132. Looking for 2200 times of the hourly gross margin as sale price. 70% payment at closing and balance paid after successful transition. Buyer to pay the fee.

 

“Sold for 2000 times of the hourly gross margin. No guarantee.”

 

13042201 – VA Company – Share sale only. 3 consultants on multiple years contracts. Combination H-1B, EAD, and Citizens. Vendor to Century Link and Disys. Total yearly Revenue around $566,000. Gross yearly margin around $155,000. Looking for $142,000 as sales price. Paid 100% at closing.

 

“Sold assets and contracts for $142,000 as sale price.”

 

20020301 – West Coast Area Company – Many Direct Clients Yahoo (Verizon Media), AAA Insurance, Stanford Health Care, Dollar Shave Club, Nutanix, NetApp, Red Ventures, SFox, Petasense and Eltropy. MSP’s include TAPFIN and ProUnlimited. Contract and Permanent placements. 20 consultants on billing. 1 consultant on bench. Only 2 H-1Bs. All others are mostly US Citizens. Around $3,000,000 annual revenue. Gross yearly margin around $550,000. Looking for $1,250,000. Will provide 90% guarantee for 12 months. 70% down payment balance paid in 12 months. Buyer to pay the fee.

 

“Sold for $1,000,000 with 12 months guarantee.”

 

IL Company – 6 candidates on billing. All C2C. HCL (VMS) Vendor. Yearly Revenue around $1,052,000. Gross yearly margin around $126,000. Looking for $250,000 as the sale price. 90% guarantee for 6 months. 50% payment paid at closing. Balance paid in 6 months.

 

“Sold the company with HCL Vendorship for $65,000 with no candidates.”

 

AI Products Company – Looking for either a buyer or a partner. Company has 4 AI Products. A Chatbot building platform for lead generation, customer support and other business needs, A review analytics Engine, An AI driven Social Media Marketing Assistant and an AI assistant for customer support agents. Customers include Singapore Post, Muthoot Finance, Mapmytours, Ramoji, Husys, Spot Media, Ducat, GSTPORT, First Meridian, Urban Drive, Pentagon Education, ECO Rent a Car and SOS Children’s Villages. Looking for $250,000 as acquisition value and $600,000 for equity valuation.

 

“Sold for $570,000.”

 

Product/Website: Number One platform for Webinars with over 2 million users from its inception. Google Cloud Partner and top Webinar platform in GSuite marketplace. Currently has 164 Active Customers. Monthly Recurring revenue Around $11,000. Monthly profit is around $1400. Looking for Equity/Partner/Investor to scale up or sell the platform. Valued at $200,000.

 

“Sold for $250,000.”

VA Company – 12 consultants on billing. One on bench. 10 on H-1B with 7 I-140 filed and 5 approved. 2 OPTs, and 1 H-4 EAD. 4 Direct Clients with VMS and SOW. State of VA, State of DE, NTT Data, Geval6 and xDuce. 7 top Tier 1 Clients including Iconma, Collabra, Astyra, and Fahrenheit. Total yearly Revenue around $1,800,000. Gross hourly margin around $160. Looking for 3200 times the hourly gross margin as sale price. 60% of the sale price to be paid at closing. Balance paid in 6 months. 90% guarantee for the sold hourly gross margin.

“Sold 50% and become a partner.”

CT Area Company – Direct Clients only. 45 consultants on billing. 37 US Citizens and 8 C2Cs. No H-1Bs or OPT/CPTs. Client include Capitol Indemnity Corp, Carecentrix, Farm Credit Financial Partners, Hartford Steam Boiler, ISO New England, Knights of Columbus, MassMutual Financial Group, MBI, Inc. Mohegan Sun, Munich Reinsurance, Roanoke insurance group Inc. Stanley Black & Decker, The Hartford, TransAccel, Travelers and Virtusa Corporation. Yearly Revenue around $7,700,000. EBITA per year is $1,200,000. Looking for $3,600,000 as sale price. Effective sale price is 2 times annual gross margin. $1,500,000 down payment and balance will be financed by seller for 6 months with 90% guarantee for 6 months. Complete back office in India, scalable.

 

“Sold for 4 times EBITA.”

 

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 with $1.2M down payment and balance after 9 months.”

East Coast Company – 4 candidates on billing. W2 & C2C. Vendor to Tech Mahindra, The Proven Methods, and AVAPP. Yearly Revenue around $500,000. Gross yearly margin around $70,000. Looking for $150,000 as the sale price. 90% guarantee for 6 months. 50% payment paid at closing. Balance paid in 6 months.

“Sold for $100,000. All paid at closing.”

IL Area Company – 6 consultants on billing. 1 US Citizens, 1 H4 EAD, and 5 H-1Bs. All H-1Bs are in approved I-140. Yearly Revenue around $1,000,000. Gross yearly margin around $115,800. Looking for 3000 times hourly gross margin as sale price. Will provide 6 months guarantee for 90% of the GM.

 

“Sold for 1.5 times the annual gross margin. Sold in 3 weeks.”

 

MD Area Company - 21 consultants on billing. Yearly Revenue around $3,000,000. Gross yearly margin around $300,000. Looking for 1.5 times the annual gross margin as sale price. Down Payment 50%. Balance paid in 6 months. Will provide 6 months guarantee for 90% of gross margin.

 

“Sold on asset basis, at 3000 times the hourly margin.

 

MD Company – Asset Sale Only - 19 consultants on billing. All on H-1B. Total yearly Revenue around $2,500,000. Gross yearly margin around $380,000. Looking for 1.35 times the annual gross margin as sale price. Will provide 6 months guarantee for 90% of the hourly gross margin.

 

“Sold for 1.215 times the annual gross margin as sale price.”

 

Company with one direct client – 53 consultants on billing. 39 H-1B, 4 OPT, 4 C2C and others. Total annual revenue around $7,000,000. Yearly gross margin more than $1,750,000.

 

“Sold for around 1.5 times annual gross margin and profit share for 2 years.”

 

VA Area Company Project company. 51 consultants on billing. H-1B and OPT combination. Yearly Revenue around $6,000,000. Gross yearly margin around $1,000,000. Looking for 1.5 times the annual gross margin as sale price. Down Payment 50%. Balance paid in 6 months. Will provide 6 months guarantee for 90% of gross margin.

 

“Seller kept the company and continuing the projects. Sold the assets for 1.5 times annual gross margin.

 

MD Area Company - 101 consultants on billing. Combination OPTs, H-1Bs, CPTs, GCs, EADs and Citizens. Mobile, UI and BigData skills. Total yearly Revenue around $12,800,000. Gross yearly margin around $3,800,000. Looking for $5,700,000 Will guarantee for 6 months’ performance. Down payment 50%.

 

“Seller got the asking price. But gave 12 months guarantee.”

 

TX Area Company - 100 consultants on billing. Combination 28 OPTs, 67 H-1Bs, CPTs, GCs, EADs. 41 GC Process going on. Good skills. Few Direct Clients including CISCO. Total yearly Revenue around $11,500,000. Gross yearly margin around $2,000,000. Looking for $4,000,000 Will guarantee for 6 months’ performance for 90% of gross margin. Down payment 50%.

 

“Seller split the company in to 2 and sold 1 part at 3000 times gross margin for the mix of H-1Bs and OPTs.”

 

TX Area Company - 35 consultants on billing. 1 on bench. H-1Bs and TNs. Labor filed for all H-1Bs and some TNs. Well established company. Broward Health/Cap Gemini/Intel/Intuit/State of Washington/TCS (CMCA)/Tech Mahindra MSAs. 5 recruiters/bench marketers in India operation. Space available to scale up to 20 offshore recruiters. Total yearly Revenue around $5,400,000. Gross yearly margin around $1,200,000. Looking for $1,500,000 as sale price for consultants and $100,000 per client when they become active during first 6 months period. Will provide 6 months guarantee for the 90% of the hourly Gross Margin.

 

“Seller got 3000 times hourly gross margin as sale price. Provided 100% guarantee for 6 months. Ran the company for 6 months.”

 

East Coast Company 3 consultants on billing. No H-1B. Asset Sale only. Yearly Revenue $136,000. Gross yearly margin $64,000.  Looking for 1X Gross Margin. Will provide 12 months guarantee for the GM with 50% down payment. Asset Sale only. Buyer to pay $2000 per candidate as fee. 

 

“Sold for 1X Gross Margin.”

 

TX Company – Asset Sales only. 2 candidates on billing. All on OPT/CPT with SalesForce. Yearly Revenue around $240,000. Gross yearly margin around $80,000. Sale price $60,000. 100% payment at closing.

 

“Assets sold for 1500 times the hourly gross margin. 100% paid at closing. No guarantee.”

 

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.”


Overall, the going valuation for H-1B dependent company is around 1.5 times yearly gross margin without any direct clients. If there are direct clients, then the valuation is around 2 times the yearly gross margin. Companies with good direct clients and even if they do not have H-1Bs, are valued around 4.5 times yearly EBITA. Companies with Products and Projects are valued differently.  (The Gross Margin is calculated by subtracting 1.1 times the pay rate from the bill rate. 1.1 is cover 10% direct expenses. Also, any other direct costs like medical insurance, vacation and bonus will be deducted.)

  

Sellers

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 Interview 
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
10. Settlement 
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.

Contact Us Today!

Contact:

 

Global 1 Company, Inc., 

Frisco TX 75035.

(Phone) 469-444-0560 

(Fax) 469-444-6460

ravi@global1company.com

 

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