BUSINESS BRIEFING M&A Inside Track in association with Printing Money By Nikki Freeman This is the first of a series of articles from Knight Corporate Finance for Print IT Reseller, as we look to invest time in a market sector where we see significant potential for companies and shareholders to build and realise value. Knight CF is a boutique corporate finance firm working in the world of M&A. Over the last 15 years we have completed nearly 200 deals working for business owners seeking funding, investment or a sale of their business. We have focussed on the Comms and IT channels and have helped our clients realise over £1 billion of value from their businesses. Over the course of our history we have seen companies in the channel adapt, embracing changes in technology and business models, and as a result we have seen huge inflows of funding, mainly driven by private equity investing in growth platforms. This has been good for us as it created an increasing number of acquirers competing for the best assets, increasing the number of trade sales, in turn encouraging new businesses to invest. The vast majority of our deals to date have been within the Comms/ IT sectors. Our view is that the managed print sector has many parallels but nowhere near the number of deals: Print was the original tech recurring revenue model; It has adapted its business model to a massive change in technology and user dynamics; and is full of entrepreneurs that have built genuine value in their businesses. However when we researched the sector in terms of M&A the difference in the number of deals is startling. Between 2020 and 2023, we have seen 400 deals in the Comms channel, 401 deals across IT Managed Services, but only 53 deals in the Managed Print arena. These differences may be attributable to a number of factors including the relative market size of the sector; the impact of Covid and the shift to hybrid working affecting sector growth; and business evolution resulting in the convergence of all three channels under a single banner. We are convinced there are more deals and investment available in this sector than the current levels suggest. Perhaps external perceptions need to change to demonstrate how managed print adds value and how it has demonstrated an ability to pivot into other areas of the office environment to cross/up sell services. From a deal perspective valuations are based on financial metrics including size, growth, recurring revenue and profitability. These are a factor of management strategy and people, customer acquisition/ retention; product expertise and proposition. Certainly shareholders should seek to understand the options that are available to them to grow and realise value from their businesses. This is where we come in. We are here for the long term and build long term relationships with acquirers, investors and prospective clients. Over the course of the year we would welcome the chance to meet you and please do check our website to see what we have achieved for our clients. To arrange a confidential call, please email me [email protected] or visit our website at www.KnightCF.com PRINTITRESELLER.UK 49
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