Successful IT managed services company finds its ideal transition
Enlightek was a company that provided IT managed services and was doing well, with 30 employees and a revenue of $3.3 million. The founders, who had been running the business for over ten years, were looking for a way to exit the company profitably. To achieve this, they contacted Freeman Logan, a mergers and acquisitions advisory firm that was well-known for its expertise in the technology industry and its successful track record in advising similar businesses.
Before engaging Freeman Logan, the founders had considered other M&A advisors but decided on Freeman Logan due to their extensive knowledge of the tech industry. Freeman Logan started the engagement by performing a thorough analysis of Enlightek’s finances, operations, and market position. Based on this analysis, they developed a comprehensive marketing plan to present the business to potential buyers. The plan involved conducting a comprehensive industry analysis to identify potential acquirers who would be a good strategic fit for Enlightek. Freeman Logan also created a custom outreach strategy to reach out to these buyers and generate interest in the company.
As part of the marketing plan, Freeman Logan created a Confidential Information Memorandum (CIM), which highlighted the company’s financials, customer base, and growth potential. The CIM was then presented to a targeted group of potential buyers, which included private equity firms, strategic buyers, and high net worth individuals. Freeman Logan carefully vetted the interested parties and signed Non-Disclosure Agreements (NDAs) to protect the confidentiality of the company’s information.
After receiving roughly a dozen letters of intent (LOIs), Freeman Logan conducted an auction process to determine the highest and best offer for Enlightek. The winning bidder was a strategic buyer who saw value in Enlightek’s strong customer relationships and their talented team of employees. The buyer had a complementary business and was able to leverage Enlightek’s technology expertise to enhance their own service offerings.
Once the LOI was executed, the transaction entered the Due Diligence stage. During this stage, Freeman Logan worked closely with the buyer’s representatives to ensure that all necessary information was provided in a timely and organized manner. After successfully completing the due diligence process, Freeman Logan took the reins to lead negotiating the purchase agreement and other closing documents to protect the seller’s interests. In addition to the financial terms of the deal, Freeman Logan also helped to negotiate important non-financial aspects such as employee retention agreements, intellectual property transfer, and other key considerations.
Freeman Logan worked diligently with both the buyer and seller throughout the due diligence and closing process, ensuring that all parties were satisfied with the outcome. The sale was successfully completed, and the founders of Enlightek were able to exit the business with a significant return on their investment.
In summary, Freeman Logan’s thorough analysis, targeted marketing, and competitive auction process resulted in a successful sale of Enlightek to a strategic buyer. The founders of Enlightek were able to exit the business in a profitable manner, and the buyer was able to leverage Enlightek’s expertise to enhance their own business.