Asking price: £195,000

Sales revenue: £365,000

Net profit: Undisclosed

Fixtures value: Undisclosed

Stock value: Undisclosed

Business description
Market leading distributor and re-seller of IT security products.

In the late 1990s the current Owners of the business became aware of the significant market potential of computer security products, succeeding in being appointed as the first international resellers for one of the world’s leading providers of fingerprint identity solutions. Initially, operating as a part-time venture, by 2004, the levels of business and the range of products handled led to the formation of a dedicated company. Adding a number of complementary and competitive products along the way, this business has now grown to become one of the leading distributors and resellers of IT security products in the UK and Europe and whilst the sale of its original range has always represented the largest share of revenue, the Company now represents a total of six US & European companies with sales to a rapidly expanding UK market and some exports to Germany, Holland and a number of East European countries.

This business’s product range can be split into two primary groups, namely, integrator and enterprise solutions.

Integrator solutions involve the acquisition of developer tools (software development kits or SDK’s) that can be used to add biometric functions to new or existing application software solutions. The system not only helps the user to access functionality but also provides data on types and frequency of usage. The company sells SDK’s to systems developers and integrators. Whilst the initial sale is generally relatively low in value, subsequent sales of fingerprint reader hardware provide an on-going revenue stream into the future. To date this market has been dominated by the education sector but it is growing rapidly in other areas including retail solutions and small/medium size business systems. Traditionally, approximately 80% of the Company’s turnover is generated from this sector.

The remaining 20% of business comes from the sale of enterprise solutions to small, medium and large organisations. These enterprise solutions comprise ready to run systems that are used in commercial environments to enhance systems security and to limit or prevent unauthorised use of data systems. The systems provide not only log on security but also control and monitor access to applications including the Internet. Although this side of the business currently represents the smaller part of the overall business, nonetheless, this represents an area for significant growth in the future.

The Company has a relatively small number of Clients who deal with large numbers of end customers. This makes the business very easy to run and manage. The Company has well established relationships with its suppliers and similar relationships with all of its customers. The Company prides itself on the quality of its service to customers and this is evidenced by the amount of repeat business and recommendations it receives.

Turnover for the 2008 financial year was slightly in excess of £365,000 generating gross profits of approximately £134,000 with a pre-tax profit of £23,000 after Directors remunerations of £47,500. As such this represents an excellent opportunity to acquire a firm foothold in a market that is set to grow very quickly and significantly for many years to come and should be particularly attractive to a company involved in a complementary IT sector looking to expand into the IT security market or to a private purchaser with the requisite IT and technical sales skills.

Key strengths:

As an early entrant to the market sector, the Company has built an impressive track record that is translating into a solid year on year sales performance. The technology used is still relatively new but is increasingly being accepted and represents a more practical, effective and affordable alternative to older technologies.

By developing the software developer and integrator market, the Company has established a strong presence in the market and as a result has a solid customer base of regular customers. The business is easy to run with a relatively small number of customer contacts who service high volumes of end users. The initial sale of software to customers generates high volumes of repeatable sales of hardware into the future.

This business has an excellent reputation for quality of service. It holds stocks of most products enabling it to respond rapidly to all customer orders with the majority or deliveries being made on a next day basis.

Key opportunities:

The Company has a strong demand for its services combined with potential to increase turnover rapidly. A new owner contributing fresh ideas, drive and enthusiasm, particularly in the fields of sales and marketing will have an excellent advantage of building on an established and successful platform.

The technology on which the business is based is becoming increasingly accepted in the market with more and more applications being identified for its use. In life cycle terms, the technology is new and therefore has many years to run before being overtaken by as yet undeveloped new forms of technology.

Expansion of enterprise solutions represents a major business opportunity that in time will outstrip the developer/integrator market. In order to achieve this, the Company would benefit significantly from an increase in marketing and sales capabilities.

Acquisition of the Company will provide not only an immediate increase in sales to the Buyer but an opportunity to branch out into a new market sector. The business would be particularly attractive to a company or individual already involved in the IT sector.

Having weathered the effects of the economic downturn to such an extent that current sales are above 2008 levels, this business is ideally placed to take full advantage of the economic recovery. As such with additional sales resources in place the current Owners of the business genuinely believe annual sales in excess of £750,000 are easily achieveable.

Financial information:

The business is offered for sale as a going concern. All financial discussions will take place directly between the vendor and interested parties under the auspices of Turner Butler.
Turnover for the 2008 financial year was slightly in excess of £365,000 generating gross profits of approximately £134,000 with a pre-tax profit of £23,000 after Directors remunerations of £47,500.
Throughout its operation, the business has been very carefully managed.. The Company has a policy of not borrowing any funds from external sources and therefore has no Bank borrowing facilities, all creditors including PAYE, VAT & Corporation Tax are maintained up to date well within credit terms and the Company keeps a very tight rein on its debtors and has never had any bad or non-recoverable debts.
The Asking Price of £195,000 is based on the sale of the shares in the business based on a Balance Sheet value of £37,600.
Full financial information is available on request.

Employees: The current Owner/Managing Director is responsible for the day-to-day running of the business supported by a Technical Manager employed on a contractual basis to provide full pre and post sale technical support as well as one full-time and one part time sales/administration assistant. The business is currently in the process of recruiting a full time Sales Representative who will also be retained on a contractual basis.

Relocatable: This business can be relocated.

Property: Leasehold

Location
The business currently operates from serviced office accommodation located on a small, rural industrial estate in Sussex and as such is easily re-locatable.

Competition / Market
Not surprisingly for a business operating in the IT sector this business has a very well designed, informative and easy to navigate website that performs very well within all of the major search engines. The website features strong links to the companies represented and acts as a major lead generator either through referrals from its Principals or directly. Although a small business with limited resources, it undertakes an active sales and marketing programme including tele-marketing campaigns to generate leads and build/maintain awareness of the company and the products it represents together with periodic direct marketing campaigns, oftern in conjunction with its vendors. The most effective form of matketing however comes from repeat business and word of mouth recommendation testimony to the excellent reputation the business has built for its products and its pre and after sales service.

Support & training
The current Owner would be pleased to assist in all the handover and training necessary to ensure a smooth transfer to new ownership.

Reasons for selling
This is a genuine retirement sale. The current Owner believes that a buyer with more sales and technical expertise can expand the business more rapidly than is currently being achieved at present. This is considered to be the major factor in holding back the expansion of the business.