Mirus IT goes shopping for London acquisition

MSP on hunt for London-based IT service provider with a turnover of between £1.5m and £2.5m

MSP Mirus IT Solutions is gearing up to make its first strategic acquisition but says potential targets are overvaluing themselves.

The Milton Keynes-based outfit is running the rule over multiple IT providers based in London as it looks to extend its presence in the capital, managing director Paul Tomlinson told CRN.

Candidates will ideally have 15 to 20 staff, a turnover of between £1.5m and £2.5m and will sell only IT services, opening up cross-sell opportunities for Mirus' managed disaster recovery and hosted voice services.

"We have a list of targets we have identified, and funding in place, so it's really now just about contacting those people and moving things forward," Tomlinson said.

"The problem we are having is unrealistic valuations of what businesses are worth. Four to five times EBITDA is the multiple you will typically be at for the size we're looking at."

Founded in 2002, Mirus has 86 staff and is looking to double its turnover from the current marker of £9m over the next five years, Tomlinson revealed. The firm has already made two acquisitions, but they were both sub-£200,000 and the result of local providers failing and it rescuing the customers.

Mirus IT already has a London office but Tomlinson said an acquisition would be needed to transform it into a "London MSP".

Some 35 of Mirus IT's 200 customers are headquartered in London, up from five in 2012, but all new business activity is now being driven out of the capital, Tomlinson said.

"The office we have in London is small and is just a shell really; it would take us a long time to create that if we didn't acquire something," he said.

"We are hoping to win the business in London at a higher rate and then deliver for a lower cost from Milton Keynes. We would not look to put the service desk overseas because it doesn't feel like the right thing to do for a British business and that is a differentiator for us against some of our competitors."