
Mayfair Equity Partners poised to launch Nasstar sale in 1Q24
The sale of Mayfair Equity Partners-backed ICT service provider Nasstar is likely to launch early next year, three sources familiar with the matter told this news service.
Mayfair is looking to kick off the auction in the first quarter of next year, although no final decision has been made on the timing of the process, the sources said. The vendor has started initial conversations with potential bidders to gauge interest in the asset, a sector banker tracking the situation said.
The sponsor hired Raymond James to marshall a strategic review of Wakefield, West Yorkshire-headquartered Nasstar last year.
The asset is expected to be marketed off GBP 40m-GBP 50m EBITDA, one of the sources and the banker said. However, another source suggested it is too early to guarantee marketed figures; the company’s current EBITDA is closer to mid to high GBP 30m, this source said, noting that Nasstar still has a distance to go on its digitalisation journey.
In 2021, Nasstar generated GBP 23.3m EBITDA off GBP 161.2m revenues, up from GBP 22.1m EBITDA off GBP 113.8m revenues the previous year, according to financial filings.
Mayfair could explore an off-market transaction prior to the launch of a formal sale process and would be receptive to preemptive bids, one of the sources and the sector banker said.
In the event of a sale, the company could be valued at GBP 600m, a second sector banker said. Logical suitors include larger sponsors and international strategic investors looking to enter the UK, this banker added.
The company generates more than GBP 200m in annual sales at present, according to Mayfair’s website.
Mayfair backed the management buyout of IT services provider GCI in May 2018, and has since pursued a roll-up strategy, buying local peer Modality Systems in June 2018 before agreeing to acquire Nasstar in a take-private deal for GBP 79.4m in December 2019 and merging the businesses under the Nasstar brand.
More recently, Nasstar agreed to purchase UK-based KCOM’s national ICT business in June 2021, and local cloud consultancy service provider Colibri Digital in February this year.
The company has a Likely to Exit (LTE) score of 51, according to Mergermarket's predictive algorithm*
Nasstar provides a range of information and communications technology (ICT) services, including managed IT services, cloud services and cybersecurity, to help corporate and public sector customers with digital transformation, according to Mayfair’s website.
The company has more than 1,000 employees with presence in the UK, the US and Malaysia. Its customers include Jaguar-Land Rover, Center Parks and Sainsbury’s Bank, per its website.
A representative for Mayfair Equity declined to comment. Raymond James and Nasstar did not respond to requests for comment.
*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.
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