Capita has acquired Trustmarque for £57m in cash, ending the software licensing and services outfit's search for a new backer.
Capita was fingered as the frontrunner to buy the York-based outfit in May after it was named in an email forwarded from the account of one of Trustmarque's senior employees to all staff, although CRN agreed to withhold its identity in our story. At the time, Trustmarque insisted it remained in talks with multiple trade and private equity bidders.
Market chatter that Trustmarque's private equity backer, Endless, was looking to review its options for the business first surfaced in November following Trustmarque's integration with another VAR in its portfolio, Trinity.
The enlarged business, which has 620 staff, saw turnover rise 42 per cent to £192m last year, with Microsoft generating £99m of the total. Underlying operating profit hit £2.8m.
Analyst Megabuyte estimated that the enterprise value of the deal stands at about 11 times EBITDA, which it said "looks high".
"For us, the purchase multiple looks punchy, based on reported numbers, but then it would have needed to outgun the significant private equity interest in the business," it said.
"The deal certainly represents a great result for Trustmarque's owners, Endless Private Equity, which acquired Trustmarque and Trinity as distressed assets."
As well as having a similar public sector focus to Trustmarque, Capita said it had worked with the licensing specialist for many years as its embedded software fulfilment partner for Capita Technology Solutions.
"This acquisition provides Capita with a set of capabilities and expertise that complement our existing businesses – and the mix of core reseller activity and higher value services is a strong proposition that will sit well with our wider technology offering," said Andy Parker, chief executive at Capita.
Trustmarque chief executive Scott Haddow (pictured) added: "We are now well positioned for strong organic growth, supported by Capita's impressive expertise, experience and scale. There are a number of opportunities for integration – including our success selling services through G-Cloud – that will help us to lower costs and cross-sell services to customers."
Deloitte has been appointed as administrators for the struggling distie
It's been announced that billionaire tech pioneer Paul Allen died on Monday from non-Hodgkin lymphoma
Your latest edition of CRN
Air-IT founder Todd McQuilkin imparts the first 10 of his golden nuggets for MSP owners