IT Consulting/Value added reseller/Cybersecurity valuation

by a searcher from Columbia University - Columbia Business School

2 years ago

I am looking at a value added reseller, IT Consulting, security firm with about 10M in revs and 1M in EBTIDA.  Revenue breakdown is as followed:

84% VAR (Value added reseller)
 9 % Consulting
 7% MSSP (managed security service provider)

Company grew 30% last year, but -7% year before.  Any valuation guidelines would help.

1 like
136 views
3 comments

searcher from Babson College - F.W. Olin Graduate School

Leigh, in addition to buy/run/sell of Sage Data Security, Scott and I took a substantial cloud-based VAR under LOI and nearly went through with it (wish we had). Happy to spend a few minutes with you if you're still pursuing the deal. cburckmyer at g mail dot com

2 years ago | like reply | 0 likes

professional from University of California, Berkeley

The percentage of revenue from services is counter-trend. IT is moving to a service- SaaS- and managed-based industry. I would be cautious with a company relying mostly on selling gear, which is low margin and very much price dependent. It all depends on the type of gear they are selling, but for the most part, you will be competing with Amazon, Newegg, CDW and other powerhouses of the industry that sell directly to consumers and SMEs. In my opinion, this would make sense if you are selling hardware to telcos and service providers, or if you can define a strategy to convert the 84% VAR revenue to service-based recurring revenue.

2 years ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.