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At the beginning of 2016 we began working on a client mandate, the sale of Ardenta, a hosting business specialising in the management of e-commerce systems, with specific expertise in high-volume transactional database management. In July, it was acquired by Claranet, a leading European managed services provider headquartered in London. Below, the lead shareholder, writes about his experience working with WTA Partners.
My name is Neil Truby and I’m 55 years of age. I have been in IT for virtually all my working life, starting in 1978. From 1988 to 2001 I worked as an IT contractor, and made a very good living, never being out of work during that period. By March 2001, at forty years of age, I was already reasonably financially secure.
I then formed an IT Services company, Ardenta Limited, with a co-founder and junior shareholder with whom I am still working today. Our ambition was to become the IT Service company of choice for businesses looking for ultra-high availability and performance IT infrastructure.
We began with a single customer, a retail symbol group, for whom I had been a consultant. Early days were spent keeping that customer happy, whilst building an alternative customer base that would sustain us even if we lost the original customer (in the event this didn’t happen until 2010, when the customer was purchased by an Irish retail group who then outsourced the operations to IBM Ireland).
In 2005 we began working in the eGaming sector with an application provider uninterested in doing the nuts-and-bolts of infrastructure but in need of a partner to take care of that. This relationship, the nurturing of which has been key to Ardenta’s success, remains strongly in place today.
By 2015 Ardenta was a £10m revenue, 45-person business, doing very well and returning £1m+ EBITDA each year. But when my business partner and I considered what we needed to do to take the business to the next level – or even if we wanted to do so – it became apparent that we would need to change our hitherto conservative approach to growth. It was at this point that I decided that I would like to find a buyer for the business, as it was likely that my share of such a sale would secure my financial future.
Ardenta had a non-exec director who had previously worked with WTA. He had found them to be very effective and recommended WTA to us as an alternative to the Tier 2 Accountancy Practice which we had been minded to use. We agreed to take a meeting with WTA, and thus began a fruitful and ultimately profitable relationship.
WTA’s approach to the initial meeting was to present a significant amount of detailed knowledge about our business and our sector, and to talk with a minimum of waffle about the factors most important to us in a potential sale: Timescale, Price and Sale Terms. WTA “had the medals” to show us on IT Managed Services Sales which, in fairness, the Accountancy practice had also, but to a somewhat less specific extent. The factor which tipped our decision in WTA’s favour was its clear sector expertise, added to WTA’s willingness to be flexible in respect of its terms.
Having selected WTA, it went about helping us complete an Information Memorandum, identifying key targets, and testing the market. I really liked its structured approach: we received a formal report each week from WTA showing the progress against each possible target.
In the end, WTA arranged half-a-dozen presentations to potential buyers; briefed us in advance on, and accompanied us to each; and thereby helped us quickly narrow these down to two favourites. Outside this process WTA also identified a third very keen to bid, but unable to because it was involved in its own funding process.
Negotiations to choose the “winner” from these two were arranged by WTA, who frequently supplied both an objective digest of the pros and cons, and a subjective opinion.
I should say here that two things I really liked about WTA throughout were that I work 24x7 in my business and WTA’s principals seem to be exactly the same – they were always available, day, night or weekend - also, and in my opinion refreshingly, one would never die wondering what WTA’s opinion is!
Having selected our preferred Buyer, we moved to the Due Diligence Phase. This is a very, very stressful (for the seller) process in which the Buyer pores all over the accounts and business of the Seller, looking for potential pitfalls. I know that Self-Praise is no recommendation, but my co-founder and I had always ran Ardenta in a most straightforward way in respect of taxes, audit etc., and our Buyers were very straightforward too, so little of concern emerged.
A week before the proposed sale date we had an “All Hands” meetings with WTA, our lawyers, the Buyer and its lawyers to thrash through final points. This was another stressful but ultimately fruitful meeting in which so many details, mainly small but some not so mall, were settled by negotiation. Give and Take was the theme, but in the end it was only after this meeting that I finally truly believed that the deal was about to happen!
The deal went through on 15th July, 2016. I, my business partner, and some key option holders received our cash. My business partner and I are tied in to work for the Buyer for 24 months, against targets which if achieved could increase our pay-out significantly. I was thrilled with the end result, and despite the nervousness, ups and-downs and occasional “full and frank exchanges of views”, I am fully satisfied with the outcome.
Judged on outcome I couldn’t fault WTA, and commend their services to anyone thinking of selling their IT business.
Should you wish to discuss any aspect of this or you are considering your own exit or planning an acquisition please make contact with:
Jeffrey Jenner via firstname.lastname@example.org or
Alan Butterworth via email@example.com