The last couple of years have seen an increasing buzz around the IT & Digital sector reflected in the level of M & A activity in that space. The recently announced deal which saw Empresaria Group taking a 65% stake in ConSol Partners is very much representative of this trend.
The last couple of years have seen an increasing buzz around the IT & Digital sector reflected in the level of M & A activity in that space. The recently announced deal which saw Empresaria Group taking a 65% stake in ConSol Partners is very much representative of this trend. The deal values ConSol as a whole at around £14.5m. With net assets reported as being £2.7m, and post-tax profits of £1.2m for the most recent financial year, I’d reckon therefore that (in Enterprise Value terms) a post-tax profit multiple of around 10 was in play. This will be well up there in the upper quartile of exit multiples achieved, and given that Empresaria itself trades with a PE ratio of around 11 the strategic rationale for the deal would have to have been strong. The press release really sets that out:
These sorts of deals are highly instructive for recruitment business owners as to how to grow your business in a way that can maximise value on exit. If you would like to discuss your exit strategy then please contact James Price, or the Recruitment Accountants team.