Oakley Advisory Limited (“Oakley”), the independent corporate finance firm offering sector specialist advice across the TMT sector, has advised Modrus Limited (“Modrus”), a UK based provider of per user hosted managed services, on its proposed £13 million sale to Nasstar plc (“Nasstar”). The Oakley team was led by James Chapman-Andrews, Managing Director and assisted by Marc Horn, Assistant Director and David Rogers, Associate.
Modrus provides IT managed services and telecoms solutions to SMEs, offering a comprehensive cloud service including virtual desktop, managed exchange, IP telephony and Unified Communications, as well as providing a full IT managed service package for customers including software, hardware and support. Modrus has approximately 140 managed service clients with the majority of revenue derived from clients ranging in size from circa 50 to 250 users. Given the nature of Modrus’ services, customers tend to be contracted for long periods (typically three years) and tend to renew contracts, providing a high level of revenue visibility.
Headquartered in Bournemouth, Modrus is profitable, cash generative and has a demonstrable track record of year-on-year growth in revenue and EBITDA. For the year ending 31 March 2016, Modrus generated revenues of £6.1m (of which 85.6% are recurring) and adjusted EBITDA of £1.6m. The business also provides true 24/7 support through locations in the UK and New Zealand.
Edward Armitage, founder and CEO of Modrus, commented:
“The Oakley team combined excellent industry knowledge alongside outstanding support throughout the sale process, with the core aim of maximising competitive tension through the process to achieve a great outcome for all stakeholders. I would recommend Oakley to any technology company founder, they did a first rate job all round. In Nasstar, Modrus has found the best possible home and I look forward to working with the Nasstar team in the next phase of growth.”
James Chapman-Andrews, Managing Director from Oakley, said:
“We worked with Modrus very closely throughout the process and are delighted to have helped to achieve an outcome which takes the business to the next level. The combination of Modrus with Nasstar is a compelling one and should facilitate the growth in customers, revenues and profits moving forward.”
Oakley Advisory Limited (“OAL”) is one of Europe’s leading independent corporate finance firms offering expert, specialist advice across a range of sectors including Telecoms, Technology, Online, Media, Datacentres and Hosting. We are unique in the mid-market in offering highly specialised sector insight and knowledge combined with our Equity Capital Markets capability, meaning we can provide the fullest possible suite of advice across both public and private markets.
Modrus is the second deal announced in a week for Oakley after advising Beech Tree Private Equity on its £35 million management buyout of Wavenet Limited. These deals are the latest in a series of UK telecoms and managed services deals for Oakley in 2016 after advising Optimity Limited on an investment by FPE Capital, Southern Communications on an investment by Livingbridge, KCOM on the sale of its core fibre network to Cityfibre Plc and advising Maintel plc on its acquisition of Azzurri. In addition, during 2015 we acted on 15 TMT transactions making Oakley Advisory one of the most active mid-market advisers by volume and value of deals.