Staff at Trustmarque have welcomed its sale to a strategic trade buyer like Capita rather than a private equity house, according to the managing director of Capita Technology Solutions, the Capita division in which Trustmarque will now sit.
Capita yesterday announced it had acquired Trustmarque for £57m, seeing off competition from multiple suitors, rumoured to include private equity houses.
Endless-backed Liberata began exploring strategic options for the York-based licensing specialist last Autumn, soon after merging it with Trinity, as exclusively revealed by CRN.
Talking to CRN, Capita Technology Solutions' Simon Furber (pictured) claimed a period of uncertainty for Trustmarque's staff will be brought to a close with the deal.
"The feedback we've had yesterday and today as we've gone around the country meeting people is that an acquirer who is interested in them for their absolute technology skills and customer relationships is different from an acquirer that is acquiring them with a view to an exit and some point," he said.
"That's a really positive message for staff and if you look at the other businesses in Capita Technology Solutions they have all grown significantly within the group."
Other acquisitions folded into Capita Technology Solutions in recent years - including Call Centre Technology, the comms VAR Capita acquired in 2011 that Furber previously ran - have retained their brand name and Furber said Capita will pursue the same approach with Trustmarque.
"We think there's a lot of value in the Trustmarque brand," he said. "There's certainly no brand integration to be done. And in terms of people and offices, for the most part Trustmarque's property estate is solid. The only exception is London, where they typically use services offices and Capita has a number of offices. They are a great national footprint and we will be growing with them. The only changes in staff, other than growth, is that a few roles straddled Liberata and Trustmarque, and I think all of them stayed with Liberata."
Asked whether Trustmarque's 620 staff may have doubts over the motives and culture of a large corporation like Capita, Furber sought to draw a distinction between Capita Technology Solutions' approach and that of its parent, whose core business is outsourcing. Other VARs it has acquired, including storage VAR S3 and security outfit NTS have "all grown significantly" as part of the division, he said.
"It's a bit different from the other contracts we have around the group," he said.
Capita Technology Solutions has historically used Trustmarque to fulfil its Microsoft licensing business and Furber said owning that capability in-house was a natural step, particular given Trustmarque's cloud and services prowess.
"If you look at where the market is going, the Microsoft stack - both on-premise and cloud with Azure and Office 365 - is clearly part of every conversation now," he said. "But I think it only makes sense when you've got solid services to help a customer understand where they should go and when. That's what we've seen in terms of the Trustmarque-Trinity combination over the last few years so I think you get that very neatly with Trustmarque."
The £57m cash sum Capita has paid Trustmarque represents a hefty premium on the knock-down prices Liberata paid for a distressed Trustmarque in 2014 and bankrupt Trinity in 2013 - rumoured to be for £6m-£8m and £1, respectively.
Analyst Megabuyte said the £57m figure looked "punchy" based on Trustmarque's reported figures, but Furber emphasised that the sum was based on underlying profits.
"We've clearly focused on the underlying trading within the business rather than the reported figures as clearly there's been a lot of moving around within those businesses (Trustmarque and Trinity) as they've come together under Liberata and Endless," he said. "We announced underlying at £7.3m."
Based on a "reasonable estimate" that Trustmarque will post EBITDA of £7.5m this year - down on Trustmarque's original £9m estimate - Megabuyte said Capita will be paying a 7.4x current year enterprise value/EBITDA.
Raphael Grunschlag, head of European technology at William Blair, which advised on the deal, as well as Kelway's recent acquisition by CDW, confirmed that multiple bidders were at the table.
"I'm not going to comment too specifically, but it was a competitive process and there were multiple parties that were seriously interested in it," he said. "Capita was the most competitive in all respects: price, certainty and speed."
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