Recurring managed services
Predictable recurring revenue, strong retention and deeper customer relationships continue to be a priority for many acquirers and investors.
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Technology & IT Services
Sector experience. An active buyer network. A clear understanding of what drives value.
M&A advice for owners, shareholders and acquirers
G&G advises owners and shareholders of Australian IT Services businesses considering a sale, as well as acquirers seeking opportunities in the sector.
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Active buyer network
Different buyers see different value.
Buyer interest is not uniform. Some buyers are looking for recurring managed-services revenue. Others are seeking specialist capability, new customer segments or geographies, or services they can cross-sell across an existing customer base.
Understanding these different motivations helps us identify the buyers with the strongest strategic rationale for your business, and where the greatest value may lie.
What is driving acquisition interest
What is driving acquisition interest
Cyber, cloud & data
Specialist capabilities in cybersecurity, cloud and data remain in demand as buyers broaden their service offerings.
Automation & AI
Automation, data and AI capabilities are increasingly sought by buyers looking to expand their offering and accelerate growth.
Specialist vertical expertise
Deep domain expertise and established customer relationships in attractive end markets can create strategic value that is difficult to replicate organically.
The buyer lens
What will buyers value in your business?
Buyers look beyond revenue and EBITDA. Revenue quality, customer relationships, specialist capability, management depth and the ability to perform under new ownership can all materially influence valuation.
Revenue quality
How much of the revenue genuinely repeats?
Buyers will examine the mix of recurring services, projects, resale and other revenue, and how predictable and durable those really are.
Customer quality
How resilient is the customer base?
Customer retention, concentration, tenure, contracts and the ownership of key relationships all influence buyer confidence.
Capability
What is difficult to replicate?
Specialist expertise across cyber, cloud, data, AI and automation can create strategic value where it accelerates a buyer’s own capabilities.
Earnings quality
How sustainable are the margins?
Buyers will test maintainable EBITDA, margins by service line and the investment required to sustain performance and growth.
People & management
Can the business perform beyond the founder?
Management depth, technical leadership, employee retention and the transfer of key customer relationships all influence how successfully the business can transition to new ownership.
Strategic fit
Who has the strongest reason to own it?
Different buyers may see different value in your customers, capabilities, geography and cross-sell potential.
IT Services M&A themes & considerations
What owners should understand before going to market.
The market, the quality of the business and the strategic rationale for different buyers all influence the outcome.
What buyers are focusing on
What we are seeing in the market.
Buyers continue to favour businesses with characteristics that support durable growth and strategic value.
- Recurring and contracted revenue remain highly attractive
- Cyber, cloud, data, AI and automation capabilities continue to attract strong interest
- Buyers are increasingly looking beyond scale, to specialist capabilities and strategic fit
- Valuations reflect the quality of recurring revenue, customer retention, specialist capability and sustainable earnings
Preparing for a transaction
Early preparation strengthens value and reduces risk.
The best time to address an issue is before a buyer finds it. Understanding how your business is likely to be assessed gives you time to strengthen the areas that can influence value and transaction risk.
Key areas to consider include:
- Increase recurring revenue and visibility
- Diversify customers and reduce concentration
- Document contracts and retention
- Improve margins and service-line economics
- Build management depth and retention
- Reduce founder dependence
- Strengthen financial and operational reporting and metrics
Considering a sale, but not ready yet?
See the business through a buyer’s eyes.
If a transaction may be several years away, there can be significant value in understanding how buyers are likely to assess the business now.
G&G’s Exit Readiness process identifies the value drivers, dependencies and risks buyers are likely to scrutinise, giving owners time to strengthen the business before those issues affect a transaction.
Preparing does not mean committing to sell. It gives you more options when the time comes.
A confidential first step
You’ve built the business. Understand its value and options.
Whether you are considering a sale now, planning ahead or simply want to understand how buyers may view your IT Services business, we are happy to start with a confidential conversation.
What to expect
Confidential
Every conversation is treated with discretion.
Senior-led
Speak directly with an experienced G&G adviser.
No obligation
Start with a conversation, not a commitment.