Manufacturer Distributor of World Class Servers For Sale

Business description

Started just two years ago this business has rapidly grown – turnover in the first year alone was in excess of £670,000 - to become one of the leading manufacturers of servers in the UK – with more than 100 regular ‘live’ customer accounts. Specialising in bespoke servers – mainly utilised by Internet Service Providers (ISP’s) hosting Internet traffic, this business boasts an enviable client list that ranges from some of the smallest ISPs to some of the best known, largest technology-based companies in the UK.

Already well known within the industry for providing innovative and cost effective ‘state of the art’ systems this business is committed to developing and delivering the highest quality, proven, reliable and cost effective solutions to its customers through continuous product development and system design. Setting the standard for quality, reliability, and performance, this business provides the user with the superiority and the dependability needed, along with an affordable price. Dedicated to very responsive order turnaround times – especially attractive to the smaller ISPs, every system is custom configured and built to order, supplied on a ‘just in time’ basis, ensuring customers get only the most up-to-date systems whilst minimising the need for this business to hold expensive stock.

Aside from the considerable turnover generated from server manufacture and distribution, this business has recently been appointed the UK hardware manufacturer of choice for one of the US’s leading IT Disaster Recovery players, on behalf of which this business manufactures data protection units and off-site data protection vaults for rapid data recovery. Offering a complete system for disaster recovery, data protection and application recovery in a single user interface that spans multiple OS and office locations (known as BareMetal technology), this initiative has already generated significant revenues from some of the leading channel distributors and system integrators across the UK and Europe and represents an increasingly important revenue generator for years to come.

The philosophy of this business is based on the pursuit of excellence through the advancement of technology. It moves quickly to install the latest technology, constantly reviewing and updating its service commitment and its methods of business, ensuring that valued customers receive the very best service and quality of result.

This is a fast growing business. In just its second year this business achieved sales approaching £1m and with the introduction of its Business Continuity products expects to double its turnover in 2007/8. To fully maximize its potential however, this business needs additional capital. An outstanding prospect for future growth, this business represents an excellent investment opportunity for anyone currently operating in the sector or for an investor looking for an excellent rate of return.

Key strengths:

Despite growing very quickly, this is a well managed business built on its owners’ and directors’ considerable experience of the IT sector – and previous experience of US West Coast technology. It has a loyal and growing client base, retaining a high level of repeat business. The company has earned an outstanding reputation for its professionalism, customer service, reliability of its equipment, flexibility, efficiency and willingness to help. A ‘boutique’ builder of servers, it clearly understands the requirements of its customers and tailors its products accordingly. It is extremely reactive to its customers’ requirements who always want their goods ‘yesterday’; and unlike its competitors, this business doesn’t let them down. It is quick to release new product – often before it is available to the general market. Working on a ‘just in time’ basis, this business has a minimal requirement for expensive stockholding. It is competitive in price whilst still maintaining margins many of its competitors can only dream of.

With two distinct product ranges, it is perhaps in this area where this business has the greatest competitive advantage however. Built from a background steeped in US West Coast technology, this business has introduced a raft of ‘state of the art’ developments so as to perfect the design and manufacture of innovative, small footprint aluminium servers which are more flexible, technically superior and more economical than many other suppliers’ products in the industry. Its servers have a number of unique features including an aluminium chassis manufactured to its own design. Its ultra low depth case design, drastically reduces the costs of rack space and uniquely within the marketplace the server interface faces forwards rather than backwards, eliminating the inaccessibility problems of competitor products.

Its Business Continuity product range is equally, if not more impressive - this company being one of only a few within the industry with the ability to provide ‘BareMetal’ recovery technology - an ‘all in one’ systems approach to business continuity integrating data protection, system recovery and application recovery in a single user interface that spans multiple OS and office locations. Particularly attractive to small and medium sized businesses these solutions enable high value data protection and business continuity at a price that to date has been well beyond them. This business currently has the exclusive rights to the manufacture and distribution of this technology in the UK and Ireland. In addition the company is in the course of finding and appointing resellers in Europe; a reseller in Dubai has already been appointed and has achieved sales; and a manufacturer and distributor in China is under evaluation.

Property information

Location:

The business is located in one of Hampshire’s major commercial centres, operating from approximately 2,500 square feet of premises including storage, workshop facilities and administrative offices.

Occupied on a short term rental basis, rent is £2,154 per month all inclusive.

Other information

Expansion potential:

There is an outstanding opportunity to build on the existing business levels and customer base of this company. With a strong demand for this business's products and services, investors contributing fresh ideas and funds will have every advantage of building on an excellent platform. With additional working capital available, this business will be better positioned to take advantage of opportunities, some of which are very sizeable indeed, that arise from the existing and potential client base of this business.

By far the greatest opportunity for this business is within the Business Continuity sector. Conservative estimates suggest turnover for this range of products will treble during the coming financial year with more aggressive advertising and marketing and more effective targeting of prospective customers. With potential margins of approximately 45%, this represents an outstanding opportunity for this business. Additional turnover will also arise through the business’s re-seller network. With six re-sellers already on board there is considerable scope for further expansion in this area.

Competition / Market:

Not surprisingly for an IT based business, this company has a very well designed, informative and easy to navigate website that performs very well in all search engines for all appropriate search topics. Web traffic is boosted by the use of a sponsored Search Engine Adwords programme bringing interest from users of competitor products. In the Server sector, this business benefits most from the most cost effective form of marketing, strong word of mouth recommendation – particularly amongst the ‘hosting’ community, testimony to the high level of customer service this business provides and the reliability of its equipment. This business also receives a number of leads from the US based manufacturers of its Business Continuity range of equipment. Future activity within this sector will be particularly aimed towards building up the re-seller network and targeting appropriate corporate clients.

Support & training:

Although the current owners would consider a full offer for the business as a whole, their preference would be to retain a stake in the business and continue to work within it to assist in its long term development.

Reasons for selling:

Having invested £120,000 to date to establish an excellent platform for growth, the owners believe the business needs a further injection of capital, potentially from another business already operating within its sector and with the benefit of a sales and marketing infrastructure already in place, in order to fully realise the potential there undoubtedly exists within this business.