Selling a company in IT systems houses, software and media
IT services companies, managed services providers, software businesses and digital media houses: here a large succession wave meets an unusually active buyer landscape. We advise owners on sale, succession and bringing in partners, as with Computing Forum, StoryDOCKS and tigermedia.
Thousands of IT services companies, one buyer's market
Germany has several thousand owner-managed IT services companies, many of them founded in the 1990s and now facing succession. At the same time, nationwide strategic buyers and capital-backed IT services groups are acquiring at a high pace, because skilled staff and client access cannot be obtained any other way. What buyers want is clear: recurring revenue from managed services, maintenance and cloud, a certified team and clients who do not depend on the owner.
In software, different metrics count, recurring revenue, churn and growth, but the buyer rationale is similar: strategic software groups and private equity investors buy products with a market position in a niche. In media, finally, publishers, media houses and family offices are looking for digital business models and brands with their own audience. In all three fields, a structured process with several bidders decides on price and partner.
IT services companies and managed services
Infrastructure, network, security, cloud, outsourcing of the IT department for the Mittelstand. Buyers are nationwide IT services groups and buy-and-build platforms acquiring regional presence, skilled staff and managed services contracts. The share of recurring revenue is the central value argument.
Software and SaaS
Vertical software, specialist applications, SaaS products with niche leadership. Buyers are strategic software groups expanding their portfolios and private equity investors with a software focus. Valuation is based on recurring revenue, customer retention and growth, frequently as a revenue multiple.
Digital media and content
Digital publishing offerings, children's media, platforms and brands with their own audience. Buyers are publishers and media houses in transformation, family offices and investors with media experience. Own content, rights and reach are the currency.
What buyers pay for in this sector
IT services companies are valued on sustainable EBITDA, software companies frequently on recurring revenue. In both cases, three factors determine the multiple.
Recurring revenue
Share of managed services, maintenance, licences and subscriptions in revenue, contract terms and cancellation rates. Project business is valued markedly lower than recurring revenue with the same clients.
Team and certifications
Number and qualifications of technicians and developers, vendor partnerships and certifications, staff turnover and age structure. In this sector buyers are above all buying people; retention schemes put in place before the sale increase the price.
Owner independence and scalability
Do client relationships and technical knowledge sit with the founder or with the organisation? Are there processes, documentation and a second management tier? For software, additionally: is the product technically future-proof and can it be developed further without the founder?
Computing Forum → Pusch-Data
Founded in 1996, the IT services company Computing Forum from Aalen takes on all the tasks of an in-house IT department for Mittelstand clients, the healthcare sector and industry. To settle the succession and safeguard the jobs at the site, the owners engaged us to search for a partner. Pusch-Data GmbH prevailed in a competitive process.
Read the full announcement →From IT services company to media incubator
Succession sale, admission of a long-term shareholder, buy-side stake: three transactions, three different briefs.
Questions on selling an IT services or software company
How is an IT services company valued?
On sustainable EBITDA and a multiple that depends above all on the share of recurring revenue, the skilled labour base and owner independence. An IT services company with a high managed services share is valued markedly higher than a project-driven business of the same size. Our fixed-price company valuation provides an initial assessment.
How is a software company valued?
Frequently as a multiple of recurring revenue, supplemented by growth, churn and profitability. For smaller, profitable providers of vertical software, EBITDA is equally relevant. What matters are verifiable metrics: contract base, renewal rates, revenue per customer and development spend.
Who buys IT services and software companies?
Nationwide IT services groups and capital-backed platforms, strategic software groups, private equity investors with a technology focus and, for smaller units, regional competitors. Only a parallel process shows which group offers the best price and the most suitable solution for employees and clients.
How do I secure my team during the sale?
By making retention part of the preparation: equity or bonus schemes for key people, clear communication at the right time and a buyer whose culture fits. In this sector buyers are buying people, so continuity is in their interest too. Commitments can be anchored contractually.
How long does the sale take?
From preparation to signing, we expect six to nine months. Preparation covers documentation, valuation and the anonymised approach; this is followed by offers, due diligence and contract negotiation. Confidentiality towards clients, employees and competitors is maintained until signing.
Do you run an IT services, software or media company?
The first conversation is non-binding and, of course, confidential.