Suitors circle Imtech ICT as auction process kicks off

At least half a dozen parties have already registered interest as Deloitte appointed as auditor partner

Imtech ICT's UK boss has likened the VAR's impending sale by its debt-laden parent to a struggling football club selling off its star player.

Pan-European technical services monster Imtech announced on Thursday it intends to auction off the highly profitable IBM, Cisco and Juniper partner as part of its efforts to slash debts by €400m (£328.5m).

Talking to CRN, Imtech ICT UK managing director James Morgan revealed that a handful of parties have already expressed an interest in the business, which employs 2,380 people across seven European countries and the Philippines.

Auditor Deloitte has been brought on board to perform vendor due diligence so suitors know exactly what they are bidding for, Morgan added.

Netherlands-headquartered Imtech, which employs 26,000 staff in total, is in financial strife after uncovering irregularities in some German and Polish projects last year.

Morgan likened the auction to Imtech selling off its crown jewels, adding that Imtech ICT would appeal to both trade and private equity buyers.

"The ICT business is one of, if not the, best-performing division," he said.

"To use a footballing analogy, if a club is struggling, they sell off their best player. We had a record year last year and have money in the bank – the sale is based on problems in other parts of the group that we are entirely unaffected by. I can only envisage positive outcomes."

Across Europe, Imtech ICT generates an EBITDA profit of nearly €40m on revenue of €740m, Morgan said.

"I could well imagine both types [trade and private equity] being interested as there aren't many ICT groups around Europe delivering that level of profit at that percentage and who have relationships with Cisco, Juniper, IBM and SAP," he said.

In the UK, Imtech ICT is Juniper's largest local partner, generating an EBITDA of about £2m on revenue of £52m in 2013. Morgan said it was local management's decision to sell off the UK IBM business in December, in order to invest in its partnership with Flexpod. He cited Allot Communications as another key vendor ally.

However, the intention is to sell Imtech ICT as a whole, Morgan added.

"There is no deadline [to the process] but my experience is these things take many months," he said.

"I know there are definitely half a dozen if not more parties interested in, if not all of the business, then parts of it – but the intention is to sell it all."

Bidders will score points not only on price but also for cultural fit in terms of staff and customers, Morgan added.

Alongside US strategic buyers and private equity houses, the business could prove of interest to the big European network integrators such as Logicalis or Dimension Data, onlookers remarked.

Etienne Greeff, managing director of Juniper partner SecureData, described Imtech ICT as a "very reputable business".

"The M&A market for tech companies is extremely hot but people are looking for more than just a reseller," Greeff said.

"Imtech ICT has shown they can make that journey from reseller to reseller/service provider and have very high-quality technical services, so it's good timing for them," he added.

Niall McGraine, general manager UK of distributor Westcon Security, said Imtech ICT would prove an attractive proposition for either a local competitor or international firm.

"Imtech ICT is a very well-respected business," he said. "It would provide a ready-made business to get into a customer base they've worked hard to build up."