Trustmarque’s CEO has opened up on its near three-year M&A hiatus, stressing that the nature of its merger with Ultima meant it took time to construct.
As exclusively revealed by IT Channel Oxygen, the York-based public sector-focused IT provider today announced it is merging with corporate-leaning peer Ultima.
The deal is the culmination of a two-and-a-half-year M&A hunt by Trustmarque, which last snapped up software asset management consultancy Livingstone in February 2023.
This is despite its stated desire to make multiple acquisitions under ambitious private equity backer One Equity Partners.
Talking to IT Channel Oxygen, Trustmarque CEO Simon Williams said the M&A layoff was not due to a lack of intent, however.
Trustmarque was pursuing three different groups of targets in the form of high-end cyber and data specialists, small regional players, and “people that look like us but have a jigsaw piece we don’t”.
Multiples were “just too high” among the former group, Williams said.
“They were wanting too much, or we weren’t willing to pay what they thought they were worth. From an M&A in a PE world perspective, it just didn’t work,” he explained.
Trustmarque had “started to go down the route” of looking for small regional VARs and MSPs with “much lower multiples”, Williams said.
“You acquire them, you get a bunch of customers and a bunch of expertise and just fold them in,” he explained.
At the same time, Trustmarque was outbid on a deal for a larger peer fitting into the third group, Williams revealed.
“We spoke to a fantastic company who looked like us but had a jigsaw piece we don’t around SMB. We put in a bid, and it went for a higher price than we thought it was worth.”
“And then this came along,” Williams said of the Ultima deal, which is being characterised as a merger due to the ongoing involvement of both firms’ PE backers.
It is the latest in a series of blockbuster trade M&A moves in the UK IT channel, following boxxe’s acquisition of CAE, Wavenet’s merger with Daisy Corporate Services and Advania UK’s acquisition of CCS Media.
“We’ve been having conversations with [Ultima backer] Apse for a while, just to make sure it’s right,” Williams said.
“They were very keen to continue with the success they’ve had so far.
“Mergers always take a little bit longer to make happen.
“I think we’re in a really strong position now, because it’s a big step in terms of GII, revenue and EBITDA.”
Doug Woodburn is editor of IT Channel Oxygen
