Hg explores ITM8 exit advised by Raymond James

Auri Aittokallio , Amy-Jo Crowley , Joao Grando and Gustav Hoejmark-Jensen
28 February 2022

Tweet
Facebook
LinkedIn
Google plus
Send to

Hg has hired Raymond James to sell IT services asset ITM8, three sources familiar with the situation said. Formerly known as IT Relations, the Denmark-based company is expected to come to market this quarter, one of the sources said.

Despite the process still being in prelaunch phase with no marketing material yet distributed for the sale, one of the sources said, the business generates between EUR 30m-40m EBITDA, the three sources and a fourth source familiar with the process added.

It is most likely that an EBITDA figure north of EUR 30m is adjusted, one of the sources said and added that the business has completed a number of acquisitions and has been growing well.

Its most recent purchases include IT services businesses Itadel, Cloud Teams, Emineo, and Improsec.

The vendors were informally sounding out potential bidders late last year and contacted some Europe-based PEs, one of the sources said, likely with steep price expectations. Apax and Cinven are among the pool of potential bidders looking at the asset, a fifth fourth source familiar said.

Hg is likely to be approached by international players, a banker tracking the situation added. It will be down to a handful of buyers for the asset, this banker said, adding that it makes more sense for long term investors to get involved to just keep it and hold it. ITM8 has a great buy and build strategy, a good management team and a foundation to continue growth, he added.

Hg could be pursuing a dual track process thereby considering the option for an IPO, a second banker tracking said.

ITM8 is one of the leading Danish suppliers of IT services for private businesses and the public sector. ITM8 is represented across 19 locations including Denmark, Sweden, the Philippines and the Czech Republic. The group focuses on four business areas, namely Cloud Services/IT Operations, Digital Transformation, Application Services and Cyber Security.

Following the recent acquisitions, ITM8 records yearly turnover of DKK 1.4bn (EUR 188m) and the group employs over 1,100 employees in total, according to the rebranding announcement.

Hg, ITM8m, Cinven and Apax Partners all declined to comment. Raymond James did not respond to requests for comment.