Presentation of Credentials in the Information Technology
Capital Times is a part of Globalscope Partners, an international network of M&A advisors with great experience and recently active in the Information Technology (IT Services and Products) sector having 171 IT-related M&A deals closed since 2017
Having extensive database of 1476 IT investors in our CRM we’ve done communications with every fourth of them (329).
We have received deal offers, such as NBO, from 22 potential IT investors and 4 out of them brought our clients to the deal.
Global investors usually pay attention to financial indicators, company expertise, client portfolio, personnel, business transparency and efficiency
Financial indicators:
- Size and growth of revenue
- EBITDA margin
Company expertise:
- Sectors
- Technologies
Client portfolio:
- Number of clients;
- Concentration of client base;
- Location (for example, German companies are looking at targets with representations in the DACH region);
- The presence of large enterprise clients or promising startups
Personnel:
- Location of development centers;
- Attrition rate;
- Management and its ability to develop the company, regardless of the owner
Business transparency and efficiency:
- Financial transparency;
- How business processes modelled and implemented;
- Share of non-billable time (bench);
- Legal structure complexity
As for the potential IT targets we focus on the following 8 candidates with EBITDA from 0.5m to 7.5m EUR, revenues from 2m to 21m EUR, client’s geography in Europe or USA, delivery in Europe and India, and various industry/tech expertise
Segment: IT outsourcing, outstaffing
Size: 130+ people
Revenue ‘22: € 5.9m (+36% y.o.y)
EBITDA ‘22: € 1.1m (19%)
Delivery center: Romania
Tech Stack: .NET, JS (React, Angular).
UK clients constitute 50%+ of sales
Segment: IT outstaffing
Size: 100+ people
Revenue ‘22: € 6.5m (+21% y.o.y)
EBITDA ‘22: € 1.7m (26%)
Delivery center: Romania
Comment: Top1 client holds 58% of revenue, but it’s 8 different PMs
Segment: consulting, development
Size: 100+ people
Revenue ‘23: $ 2.0m (+41% y.o.y)
EBITDA ‘23: $ 0.5m (25%)
Delivery center: India
Expertise: Salesforce (Gold Partner).
One of 2 owners moved to Germany
Segment: IT outstaffing (mostly)
Size: 530+ people
Revenue: € 21.1m
EBITDA: € 1.5m (7%)
Delivery centers: Poland
Industry: FinTech
Tech Stack: Java, .NET, Python
Segment: IT outsourcing, outstaffing
Size: 230+ people
Revenue ‘22: € 8.4m (+17.2% y.o.y)
EBITDA ‘22: € 1.3m (15%)
Delivery centers: Greece, Cyprus
Expertise: Cloud, Web/Mobile, IoT, SF
Industry: Finance, Insurance, Telecom
Segment: IT outsourcing, product
Size: 130+ people
Revenue ‘22: € 8.5m (+20% y.o.y)
EBITDA ‘22 : € 1.5m (18%)
Delivery center: Romania
Expertise industry: Hospitality (clients are global hotels and restaurants)
Segment: IT outsourcing, outstaffing
Size: 100+ people
Revenue ‘22: $ 5.0m (+31.6% y.o.y)
EBITDA ‘22: $ 0.8m (16%), 1.3m in ‘23
Delivery center: North Macedonia
Industries: Telecommunications, Banking and Finance
Segment: IT outsourcing
Size: 360+ people
Revenue ‘22: $ 14.6m
EBITDA ‘22 : $ 3.1m (21%)
Delivery centers: Ukraine, Europe
Industries: Gaming & i-Gaming (betting), EdTech, FinTech
Having 102 active investors in the IT sector in 2023 we are focusing on buying the following service providers with size from 30 to 1000 FTE, revenue from 2m to 30m EUR, delivery in CEE & LatAm, and clients’ geography in USA and Western Europe
Size: 200-1000 FTE
Delivery: CEE (Romania, Bulgaria), Latin America
Financials: 15%+ top-line growth, 15%+ EBITDA margin
Interest: IT outsourcing, digital transformation services
Buyer: an international IT service provider present in more than 5 countries with 20-50 offices. The Company employs thousands of software engineers and serves 300-600 corp. clients.
Revenue: € 10-30m
Delivery: Latin America
Interest: Custom software development, system integration
Key verticals: Life Sciences/Healthcare/Pharma/TMT/Finance
Buyer: an international IT service provider present in more than 7 countries with 10-20 offices. The Company employs thousands of software engineers and has 50-150 partners
Size: 30-100 FTE
Delivery: Poland, Portugal, Romania, Bulgaria, other CEE
Financials: Could be zero or negative operational margin
Interest: IT outstaffing, IT outsourcing service providers
Buyer: an international IT group that has 10+ years of experience in the IT industry working with clients from 20+ countries worldwide. The Company has 5-10 offices around the world.
Revenue: € 2-15m
Delivery: CEE region
Financials: 15+ EBITDA margin
Services: Service providers, product companies
Buyer: an international IT service provider that has Revenue of € 30-60m and that employs 400-800 software engineers. The Company has bank loan access from international IFIs
Dmytro Baranovskiy,
Investment Banking Director
d.baranovskiy@capital-times.com
+38-050-44-258-44 (WhatsApp)
