East England IT Support (Schools + Businesses)

Persona	Q	P	I	Verdict	Key Argument
Financial Analyst	5	6	5	Investigate	Cumulative payback 2.7yr with promote-from-within + CE revenue. Deal works at ≤GBP 320k.
Operations Expert	5	5	5	Investigate	Viable only if 4 conditions stack: internal tech, buyer 2 days/month, 18-month earnout, retention bonuses.
AI Engineer	5	6	5	Investigate	CE recurring revenue is the real AI play. 40% automation ceiling limits transformation.
Risk Manager	4	5	5	Investigate	Owner=relationship is near-unmitigatable. Too many unknowns without accounts.
Search Fund Veteran	5	5	5	Investigate	Thesis hinges on one binary: who does the headteacher call — owner or technician?

IT Managed Services Provider specialising in businesses and schools in East England. GBP 362k turnover, likely 3-6 staff including owner-operator. Estimated 10-25 years in operation (school relationships take time to build). Services likely include managed IT support, helpdesk, device management, cybersecurity, and school-specific IT (SIMS, interactive whiteboards, device rollouts). Listed on Rightbiz marketplace — broad marketing, not a private deal. Company identity unknown (no Companies House data accessible).

Estimated P&L (Base Case: 20% EBITDA, GBP 288k price at 4x)

	Pre-Acquisition	Year 1 (promote-within)	Year 3 (post-automation)
Revenue	GBP 362,000	GBP 370,000 (+2%)	GBP 400,000 (+10%)
Staff costs (3-4 FTE)	(GBP 100,000)	(GBP 110,000) (+GBP 10k promotion)	(GBP 77,000) (-1 FTE via L1 automation)
Software + AI tools	(GBP 15,000)	(GBP 18,000)	(GBP 22,000)
Other overhead	(GBP 25,000)	(GBP 25,000)	(GBP 25,000)
Owner salary	(GBP 50,000)	GBP 0 (buyer has Meta salary)	GBP 0
EBITDA	GBP 72,000 (20%)	GBP 117,000 (32%)	GBP 176,000 (44%)
Cyber Essentials new revenue	—	GBP 8-20k (one-time)	GBP 10-15k/yr (recurring)
Adjusted EBITDA	GBP 72,000	GBP 125-137k	GBP 186-191k
Debt service (GBP 88k seller note, 5yr @ 5%)	—	(GBP 20,000)	(GBP 20,000)
Free Cash Flow	—	GBP 105-117k	GBP 166-171k
Cash-on-cash return	—	52-58%	83-85%

Key assumption: Buyer does NOT draw a salary (Meta salary is primary income). This eliminates GBP 50k owner-salary cost and is the single biggest P&L lever. Without this, Year 1 EBITDA drops to GBP 67-87k and CoC to 23-33%.

Payback period: 2.2-2.7 years cumulative (clears the 3.5yr acceptable threshold).

5-year exit scenario (base case):

•Year 5 revenue: ~GBP 430k (3% organic growth)
•Year 5 EBITDA at 44%: ~GBP 189k
•Exit at 4.5x (automation-improved): ~GBP 851k
•5-year cumulative cash flow: ~GBP 680k
•Total return (cash + exit): ~GBP 1,531k
•Multiple on GBP 200k equity: ~7.7x
•5-year IRR: ~50%

Sensitivity: 20% school client attrition post-acquisition:

•Revenue impact: -GBP 43-72k (depending on school:business split)
•Year 1 EBITDA: GBP 75-94k (still positive)
•Survivable? Yes, but Year 1 CoC drops to 27-37%
•Recovery: 12-18 months via CE upsell + new SME clients

Overall automation ceiling: 38-42% (vs 60%+ for pure-business MSPs). Education onsite work is structurally irreducible.

Phase	Timeline	Build Hours	Savings/Revenue
Audit + foundation	Months 1-3	20hrs	GBP 0 (understanding the business)
Quick wins (monitoring, patch, reporting, SSPR)	Months 3-5	40hrs	GBP 8-10k/yr savings
CE revenue engine (gap assessment tool, remediation sales)	Months 4-8	60hrs	GBP 8-20k Year 1 + GBP 8-15k/yr recurring
L1 auto-resolution (LLM ticket agent, PSA integration)	Months 9-15	80hrs	GBP 15-20k/yr (0.4-0.5 FTE reduction)
Scale + consolidation (onboarding automation, compliance tools)	Months 15-24	40hrs	GBP 5-10k/yr additional revenue

Total Year 1 impact: GBP 35-50k (cost savings + CE revenue)

Steady-state annual impact: GBP 40-55k/yr

AI stack cost: GBP 3-5k/yr

Builder time: ~200 hours over 18-24 months (evenings/weekends alongside Meta job)

Key constraint: Build timeline is 18-24 months (not 12) due to Meta day job. Months 1-6 are dominated by business transition — no meaningful build work possible until month 3-4.

Risk	Likelihood	Impact	Severity	Mitigation	Residual
Owner IS the school relationship — headteachers leave when owner exits	High	Critical	CRITICAL	18-month earnout tied to retention; personal introductions in months 1-3	High
Client concentration — 5-10 schools = 50-70% of revenue	High	High	HIGH	Diversify toward SME clients post-acquisition; don't overpay for school-concentrated revenue	Medium-High
MAT consolidation — schools join trusts, procurement centralises	Medium	High	HIGH	DD: identify each school's academy/MAT status; build MAT-level relationships; CE upsell as MAT-wide service	Medium
No internal service manager candidate	Medium	High	HIGH	Verify in first broker call; if absent, model GBP 40k coordinator cost (deal economics deteriorate significantly)	Medium
Financial opacity — no price, EBITDA, company name, or accounts	High	High	HIGH	Require 3yr management accounts before NDA; refuse DD without full disclosure	Low (if enforced)
Change-of-control clauses in school contracts	Medium	High	HIGH	Share purchase (no legal assignment); legal review of all contracts pre-completion	Medium
Physical presence burden conflicts with Meta workday	High	Medium	HIGH	Promote-from-within; buyer accepts 2 days/month East England commitment	Medium
Staff retention post-TUPE — key technician leaves at month 13	Medium	High	HIGH	Retention bonus (GBP 5-10k at 12 months); early relationship building	Medium
County council IT services compete on price (Norfolk S4S)	Medium	Medium	MEDIUM	Differentiate on responsiveness, cyber specialisation, personal relationships	Low-Medium
Roll-up competition (Flotek/Evergreen) — deal moves fast	Medium	Low	MEDIUM	CGT-deferred seller note = structural edge; move quickly on process	Low
School budget cuts (austerity risk)	Low	Medium	LOW	CE mandate provides structural tailwind; IT is essential, not discretionary	Low

Pre-NDA (broker call) — Binary Gates

☐Who does the headteacher call? Owner or technician? (determines if deal is viable)
☐Is there a senior technician with 3+ years tenure? (promote-from-within candidate)
☐Asking price and seller financing willingness (budget fit)
☐EBITDA / owner compensation structure (is owner salary in costs or extracted as dividends?)
☐What % of school clients have Cyber Essentials? (CE revenue upside)
☐School:business revenue split (concentration and MAT exposure)

Financial DD

☐3-5 years management accounts (not micro-entity filings)
☐Revenue by client (school vs business, size distribution)
☐Recurring vs project/ad-hoc revenue breakdown
☐Debtor aging — do schools pay slowly?
☐Owner salary, benefits, personal expenses through the business
☐Outstanding tax liabilities or HMRC correspondence

Legal DD

☐All school contracts — terms, duration, change-of-control clauses, notice periods
☐Business client contracts — MSA terms, break clauses
☐Property lease (if any) — can it be exited?
☐Regulatory: Cyber Essentials certification status, ICO registration, MS Partner agreement
☐Litigation current/pending/threatened
☐IP ownership (any proprietary tools, scripts, documentation?)

Employment DD

☐Full employee list: roles, salaries, start dates, DBS clearance status
☐Employment contracts — restrictive covenants, notice periods
☐Key person: identify the senior school-facing technician(s)
☐Contractor vs employee status (IR35)
☐Pension obligations

Commercial DD

☐Client retention rates last 3 years (school vs business separately)
☐Each school client: school type (LA-maintained, academy, MAT member), contract term, annual value
☐MAT exposure: which schools are MAT members? Which trusts? Centralisation plans?
☐Pipeline: any schools lost or gained recently? Why?
☐Competitive landscape: who else bids on these school contracts?
☐Reason for sale — retirement? Health? Failed succession?

IT/Systems DD

☐RMM platform (NinjaOne, ConnectWise, Datto, N-able?)
☐PSA platform (HaloPSA, ConnectWise Manage, Autotask?)
☐Cloud vs desktop — any legacy systems requiring migration?
☐API access to all critical systems (needed for automation)
☐Documentation quality: SOPs, runbooks, network diagrams per school
☐Cyber Essentials certification: held? When does it expire?

Comparable	Size	Multiple	Notes
M1 (B2B IT Support, South England)	GBP 580k revenue	SOLD STC before assessment	Confirms MSPs at this size move fast
M3 (Manchester MSP)	GBP 155k revenue	Offers invited	2-person, underpriced at GBP 129/mo per client
M5 (N. England MSP)	GBP 356k revenue	POA	3-pillar (support + connectivity + security)
UK MSP sector median	Sub-GBP 1M	3-5x EBITDA	Size discount applies at this scale
EV/Revenue median (600+ IT services txns)	All sizes	1.3x revenue	Aventis benchmark
Accounting practice (comparison)	GBP 250-350k GRF	0.9-1.0x GRF	School IT relationships transfer harder than accounting (15-20% vs 10-15% attrition)

No publicly available comparable transactions found for single-county education IT support MSPs at GBP 300-400k revenue. These deals are never publicised.

What Personas Agreed On

•Investigate is the right verdict — unanimous across all 5 personas (rare convergence)
•Integration score = 5 — converged from an initial 4-6 range during debate. All agreed: London-based buyer is better than Singapore framing, but Meta day job is a real constraint. Physical school work is permanently manual.
•Promote-from-within is the only viable management model — external hire at GBP 50-70k kills Year 1 economics; buyer self-managing is incompatible with Meta day job; internal promotion at GBP 8-15k is the middle path
•Cyber Essentials is the most compelling AI revenue play — not cost-cutting automation but a new product for the existing client base. GBP 8-20k Year 1, GBP 8-15k/yr recurring.
•The broker call is the only productive next step — too many unknowns to go further without price, accounts, and answers to the key binary questions

What Personas Disagreed On

•Q-score: Risk Manager (Q=4) vs others (Q=5) — Risk deducted for owner-dependency (-1.5), client concentration (-1), opacity (-0.5), MAT risk (-0.5). Others acknowledged these risks but saw Cyber Essentials tailwind and school contract stickiness as partial offsets. Resolution: framework difference (current quality vs quality + upside potential). Both defensible.
•P-score: Analyst/Engineer (P=6) vs Ops/Risk/Veteran (P=5) — Analyst revised payback from 4.8yr to 2.7yr after correcting methodology (cumulative vs simple). Engineer valued CE revenue upside. Others stayed conservative given no actual asking price.
•School relationship transfer mechanism — Veteran initially argued stickiness=untransferability. Ops reframed as two layers: strategic (headteacher, held by owner) and operational (IT coordinator, held by technicians). If technicians stay, Layer 2 transfers automatically. Veteran conceded and revised I from 4→5.

The Central Structural Insight

The entire deal hinges on one binary question: Does the school-facing relationship sit with the owner (Layer 1 only) or with retained technicians (Layer 2)?

•If owner = sole school contact: effectively a Pass — relationships don't transfer, 30%+ attrition likely
•If technicians carry school relationships: standard retention earnout works, 15-20% attrition manageable, deal is Promising at right price

This binary must be resolved in the first broker call, before NDA.

Investigate — proceed to broker call only. Do not commit to NDA or DD without answers to the binary gate questions.

Specific Next Action: Broker Call Agenda

Binary gate #1: "Who is the primary contact for school clients — the owner or a technician? When a school has a network issue, who do they call?"
Binary gate #2: "Is there a senior technician with 3+ years tenure who could step into a team lead role?"
Pricing: "What is the asking price? Is the seller open to seller financing?"
Financials: "Can we see 3 years of management accounts? What is the EBITDA margin?"
School mix: "What proportion of revenue comes from schools vs businesses? How many school clients?"
MAT exposure: "Are any school clients members of Multi-Academy Trusts? Are any planning to join one?"
Cyber Essentials: "Does the business hold Cyber Essentials certification? What proportion of school clients are CE-certified?"
Reason for sale and transition: "Why is the owner selling? Would they commit to an 18-month transition period?"

If the broker call reveals:

•Owner is sole school contact + no internal tech candidate → Pass (move on)
•Price >GBP 380k with no seller finance → Pass (budget bust)
•Internal tech exists + price ≤GBP 320k + seller commits to transition → Upgrade to Promising (proceed to NDA/DD)
•All four upgrade conditions met (tech + price + low MAT + transition) → Strong candidate (fast-track DD)