MSP — 200+ Clients, GBP 825k Turnover

Persona	Q	P	I	Verdict	Key Argument
Financial Analyst	7	4	7	Investigate	Best MSP on fundamentals; financing only works with price discipline — walk away above GBP 950k
Operations Expert	6	5	7	Investigate	Viable if broker call confirms EBITDA basis, internal ops candidate exists, and seller does transition
AI Engineer	7	5	6	Investigate	Best AI training corpus in pipeline; even buy-scenario automation delivers 15–20% margin improvement
Risk Manager	5	4	6	Investigate	Attractive asset in dangerous information vacuum; treat any price >GBP 800k without seller finance as structural no
Search Fund Veteran	6	5	7	Investigate	CGT-deferred seller note is genuine structural edge over Evergreen/Flotek; make broker call this week

An MSP listed on Rightbiz with 200+ "loyal" clients, GBP 825,000 turnover, and a claimed "guaranteed profit" of GBP 250,000. Location, company identity, and asking price are all undisclosed. The business is described as a "thriving IT support provider." At GBP 344/month average revenue per client, the client base appears to be small-to-mid SMEs (5–8 users each at standard UK MSP pricing). This is the largest MSP by revenue and client count in the pipeline, sitting in the top 15% of UK MSPs by size — large enough to attract roll-up buyers (Evergreen, Flotek) but small enough for an individual acquirer.

Scenario A: GBP 250k = EBITDA (40% probability)

	Pre-Acquisition	Year 1 (Post-Ops Mgr)	Year 3 (Post-Automation)
Revenue	825,000	742,000 (10% attrition)	850,000 (repricing + growth)
Staff costs	(350,000)	(340,000)	(280,000)
Ops manager (promote-within)	—	(12,000)	(15,000)
AI tooling	—	(19,000)	(19,000)
Other overhead	(225,000)	(210,000)	(200,000)
EBITDA	250,000	161,000	336,000
Margin	30%	22%	40%

Scenario B: GBP 250k = SDE (50% probability)

	Pre-Acquisition	Year 1	Year 3
Revenue	825,000	742,000	850,000
True EBITDA (post owner salary)	180,000	112,000	267,000
Margin	22%	15%	31%

Returns at GBP 800k Deal Price (target)

Metric	Scenario A (EBITDA)	Scenario B (SDE)
Year 1 FCF (after debt service)	GBP 61,000	GBP 12,000
Year 3 FCF	GBP 236,000	GBP 167,000
Cash-on-cash Year 1	30.5%	6.0%
Cash-on-cash Year 3	118%	83.5%
DSCR Year 1	1.61x	1.12x
5-year cumulative cash flow	~GBP 750k	~GBP 500k
Payback period	~2.5 years	~3.5 years

Assumes GBP 200k equity + GBP 300k seller note (5.5%, 5yr) + GBP 300k bank debt (7%, 7yr). Annual debt service ~GBP 100k.

Month	Action	Saving	Cumulative
1–3	Deploy zofiQ for ticket triage (native ConnectWise/NinjaOne integration). Zero engineering time.	GBP 8k/yr (dispatcher time)	GBP 8k
2–4	Build custom L1 resolver using Claude API + RAG on ticket history. Staff engineer side project, 4–6 weeks evenings/weekends.	GBP 28–35k/yr (1 L1 tech)	GBP 36–43k
3–6	Automate client monthly reports from RMM/PSA API data. Custom LLM pipeline.	GBP 14–18k/yr (0.5 FTE)	GBP 50–61k
6–12	Client onboarding automation (M365/VPN/email provisioning scripts).	GBP 14–18k/yr (0.5 FTE)	GBP 64–79k
6–12	Use improved SLA metrics to justify repricing legacy clients. Target: 50 clients from GBP 200→GBP 350/mo.	GBP 90k revenue uplift	+GBP 90k revenue
12–18	Full optimization: -2 FTE net, custom tools operational, repricing complete.

AI stack cost: GBP 5–19k/year (zofiQ + Claude API + custom pipeline vs commercial Neo Agent).

Net annual saving at full optimization: GBP 50–60k (cost reduction) + GBP 75–100k (repricing) = GBP 125–160k margin improvement.

Key dependency: Technology stack must be modern (ConnectWise/NinjaOne, not legacy). If legacy RMM, add 3–6 months and GBP 15–25k migration cost.

Recommended: CGT-Deferred Seller Note

Component	Amount	Terms
Buyer equity	GBP 200,000 (25%)	Cash at completion
Seller note (CGT-deferred)	GBP 300,000 (37.5%)	5.5%, 5-year, interest-only Year 1
Bank debt	GBP 250,000–300,000 (31–37.5%)	7%, 7-year amortising
Total deal	GBP 750,000–800,000

CGT advantage for seller: Deferring GBP 300k of proceeds across 5 years lets the seller spread capital gains across tax years, potentially saving GBP 15–30k in tax vs all-cash. Evergreen and Flotek pay cash — they cannot match this structure. This is the buyer's competitive edge on deal terms.

Key terms to negotiate:

•12-month seller transition (consultant basis, 2 days/week)
•15% retention holdback on seller note (released at 12-month client retention milestone)
•Change-of-control carve-out: seller introduces buyer to all top 20 clients pre-completion
•Non-compete: 3 years, 50-mile radius + no-poach of staff

Walk-away price: GBP 950,000. Above this, DSCR in Scenario B drops below 1.0x — existential risk for a first-time buyer.

#	Risk	Likelihood	Impact	Severity	Mitigation
1	"Guaranteed profit" is SDE, not EBITDA — true post-replacement EBITDA is GBP 150–180k	Medium (50%)	Critical	High	First broker call question. Walk away if SDE AND price >GBP 800k
2	Asking price >GBP 950k	Medium (40%)	Critical	High	Maximum offer GBP 950k. CGT seller note as negotiating lever
3	Client concentration: top 5 clients >40% revenue	Medium (30%)	Critical	High	Gate question for broker. Retention holdback on seller note
4	Year-1 client attrition >15%	Medium (25%)	High	Medium-High	12-month seller transition, client introductions pre-completion
5	Key staff departure post-acquisition	Medium (20%)	High	Medium	Retention bonuses for top 2–3 technicians (GBP 5–10k each)
6	No internal candidate for ops lead	Low-Med (25%)	Medium	Medium	Budget GBP 50–70k external hire. Changes Year 1 FCF materially
7	Legacy technology stack (no API access)	Low (15%)	Medium	Low-Med	Budget GBP 15–25k + 3–6 months for migration
8	Evergreen/Flotek outbid	Medium (35%)	Medium	Medium	Compete on terms (CGT note, transition, culture), not price
9	On-site delivery dependency limits automation	Low-Med (20%)	Low	Low	Headcount floor higher; automation ceiling at 40% vs 60%

Gate Questions (First Broker Call — Before Any Spend)

☐What does "guaranteed profit of GBP 250k" mean? (EBITDA, SDE, MRR profit, or something else?)
☐What is the asking price?
☐Revenue breakdown: recurring MRR vs project/ad hoc vs break-fix?
☐Client concentration: top 5 clients as % of revenue?
☐Staff count, roles, and salary structure? Any senior tech lead candidate?
☐Owner's current salary + dividends?
☐Location/region?
☐Reason for sale?
☐What proportion of delivery hours are on-site vs remote?

Pre-LOI (If Gate Questions Pass)

☐Revenue trend (3-year: YE22, YE23, YE24, YE25)
☐Contract terms for top 20 clients (MSA terms, notice periods, CoC clauses)
☐Technology stack: RMM, PSA, security tools (modern with API access?)
☐Microsoft partner status / Cyber Essentials / ISO 27001
☐Client churn data (3-year)
☐Seller willingness for 12-month transition + CGT-deferred seller note
☐Online presence / Google reviews / client testimonials

Standard DD (Post-LOI)

☐3–5 years management accounts + filed accounts (reconcile)
☐Tax returns + HMRC correspondence
☐Debtor aging, bad debt history
☐Client contracts, MSAs, change-of-control clauses
☐Full employee list (roles, salaries, start dates, benefits, pension)
☐Employment contracts + any tribunal claims
☐Property lease / IP ownership
☐Vendor contracts (RMM, PSA, security tools — transferability)
☐ICO registration, data protection compliance
☐Litigation (current, pending, threatened)

DD Cost Estimate

Item	Cost
Solicitor (legal DD + SPA)	GBP 8,000–15,000 + VAT
Accountant (financial + tax DD)	GBP 4,000–8,000 + VAT
Total	GBP 12,000–23,000 + VAT

Business	Revenue	EBITDA	Price/Multiple	Notes
M1 (B2B IT Support)	GBP 580k	>GBP 100k	SOLD STC at ~3.45x	Apple-specialist, South England
M5 (IT Support & Security)	GBP 356k	—	POA	3-pillar MSP, Northern England
M3 (Managed IT, Manchester)	GBP 155k	GBP 29k	Offers	100 clients, dual-retirement, underpriced
ECS Solutions (Flotek acq.)	~GBP 700k	—	Undisclosed	Chester, 850 clients
Simpology UK (Flotek acq.)	~GBP 1M	—	Undisclosed	Added GBP 1M to Flotek run-rate
AcquireBS REF.1526	GBP 675k	—	SOLD STC	UK Midlands, 35 years

Pattern: GBP 500k–1M MSPs trade at 3–5x EBITDA. Roll-ups (Evergreen, Flotek) pay 3–4x for bolt-ons. Individual buyers at 4–5x for quality assets. M12 at GBP 825k with 200 clients is the strongest pipeline asset by scale — comparable to Flotek's typical acquisition targets.

What personas agreed on

•"Guaranteed profit" is THE gating question. All 5 personas identified this as the single most important unknown. The swing between EBITDA and SDE interpretations shifts the deal from "attractive" to "marginal" — a GBP 250–500k valuation swing.
•Make the broker call immediately. Unanimous urgency. Evergreen and Flotek are active in this segment; M1 was SOLD STC before assessment.
•London buyer profile is materially better than Singapore. All personas acknowledged the buyer correction. Ops and Veteran both moved I-scores up. No timezone friction, can visit clients, supervise staff in person. The constraint is time (Meta day job), not geography.
•CGT-deferred seller note is a genuine structural edge. Veteran, Analyst, and Risk all confirmed this gives the individual buyer an advantage roll-ups can't match at sub-GBP 1M deals.

What personas disagreed on

•P-score: 4 vs 5. Analyst and Risk anchored to P=4 (seller likely anchors to GBP 1M+, DSCR is marginal at realistic ops costs). Ops, Engineer, and Veteran at P=5 (deal is workable with price discipline). Debate converged on: the deal works at GBP 750–850k but breaks at GBP 1M+.
•Q-score: 5 vs 7. Risk (Q=5) treats unknowns as negatives; Analyst/Engineer (Q=7) use expected-value approach. Veteran mediated: "I can't call client concentration 'manageable' without knowing what it is — Q=6 is the honest floor, Q=7 is available post-DD."
•Ops manager cost: GBP 12k vs GBP 60k. Ops initially modelled GBP 50–70k external hire, then conceded promote-from-within is realistic at 6–10 FTE scale (GBP 8–15k uplift). Analyst reinforced: for a London buyer, GBP 12–25k is the expected cost, not GBP 60k.
•Automation saving: GBP 37k vs GBP 68k. Engineer argued build-vs-buy saves more; Ops and Risk challenged time availability. Converged on GBP 50–60k realistic estimate — partial build over 12 months.

How disagreements resolved

•P-score converged toward 4–5. The debate established a clear price ceiling (GBP 950k walk-away) that all personas accepted.
•Ops cost converged toward GBP 12–25k. Promote-from-within + London buyer proximity was accepted by all personas, contingent on confirming an internal candidate.
•Automation converged toward GBP 50–60k. Hybrid build/buy approach accepted as realistic for a time-constrained buyer.

Investigate — Make the broker call this week.

This is the best MSP in the pipeline by revenue (GBP 825k), client count (200+), and ARPU (GBP 344/mo). All 5 personas recommend proceeding to broker engagement. The deal thesis is strong if the gating unknowns resolve favorably.

Immediate next action: Contact the Rightbiz listing broker with these gate questions:

What does "guaranteed profit of GBP 250k" mean — EBITDA or SDE?
What is the asking price?
Top 5 client concentration as % of revenue?
Staff count and whether a senior tech lead exists?

Decision gates:

•Proceed to LOI if: GBP 250k = EBITDA, price ≤GBP 850k, top 5 clients <30% of revenue, internal ops candidate exists
•Negotiate harder if: GBP 250k = SDE but price negotiable to ≤GBP 700k with seller finance
•Pass if: price >GBP 950k, or SDE + price >GBP 800k, or top 5 clients >50% revenue, or no seller transition available

Gate Questions

?What does "guaranteed profit of GBP 250k" mean? (EBITDA, SDE, MRR profit, or something else?)
?What is the asking price?
?Revenue breakdown: recurring MRR vs project/ad hoc vs break-fix?
?Client concentration: top 5 clients as % of revenue?
?Staff count, roles, and salary structure? Any senior tech lead candidate?
?Owner's current salary + dividends?
?Location/region?

Next Action

Investigate — Make the broker call this week.