Penntech IT Solutions Ltd

A client-centric MSP with 24/7 capability and 99% retention rate

Founded in 2017, Penntech has developed into a leading IT Managed Services provider, having formed strong, long-standing relationships with clients across a diverse range of sectors.

Penntech provides a range of flexible and scalable options to support the IT needs of businesses, offering high levels of client satisfaction and considerable expertise at cost-effective prices.

Known for its client-centric approach, innovation and commitment to service excellence, Penntech’s service offering includes 24/7 IT support, IT consultancy, cyber security, connectivity, and sales of both hardware and software.

A majority exit to achieve financial de-risking and improved work-life balance

The client wanted to achieve a majority sale of the company’s shares. They were happy to remain in the business and continue being involved post-completion, but the main motivations were around a better work-life balance.

Our client also wanted to de-risk their position financially.

Recurring revenue strength, sector-diverse client base and a scalable platform

Throughout its time in operation, Penntech has focused on tailoring its services to the specific needs of each individual organisation. It benefits from high levels of repeat business from 99% of clients, with 67% of revenue generated by managed service contracts.

Penntech’s experienced workforce, established client relationships and excellent reputation for providing innovative, reliable solutions placed the business in an excellent position from which to achieve future growth.

“After more than eight years of running a successful IT business, it was the right time for me and the company to benefit from being part of a larger group, able to service a wider customer base with an extended portfolio of IT business solutions. We deliberated hard over the best suitor for integrating our company and Dynamic Networks were a logical fit for us with their focus on putting the customer first, their quality of service and similarly strong company values.”

Lewis Pennell, Managing Director, Penntech

Driving competitive tension to uplift value and navigating complex financial negotiations

A team led by Jacob Lord, KBS Corporate Associate Director, assisted the client with their decisions and considerations and negotiated the deal on their behalf, adding hundreds of thousands of pounds to the transaction value from the original offer received.

The team coordinated all meetings, prepared and shared feedback from prospective acquirers accordingly, and attracted over 80 interested parties in three months of marketing.

The negotiation process, which was highly competitive, encountered many turns throughout, and given the level of interest there was much back and forth. The client was unfamiliar with the typical financial instruments for a transaction, such as EBITDA, working capital and cash/debt free, and Jacob assisted throughout to ensure the client knew what was being proposed.

“Thanks to their dedication and expertise, the sale was completed successfully and with minimal disruption. I highly recommend KBS to any business owner considering a sale – their team truly goes above and beyond.”

Lewis Pennell on KBS Corporate service

Jacob was also present throughout due diligence to advise on the commercial items of the transaction, review the working capital calculations and assist with financial modelling.

Six competitive offers secured, strategic mid-market trade buyer selected

Six offers were received, three of which were very close in value and KBS worked with the client to settle on the best route forward that realised his goals from the sale. Some very different routes were presented for the future for our client, who wanted to retain his position of being involved and driving the business forward. Hence a mid-size trade route was preferred.

KBS also introduced Pareto IFA, a fellow K3 Capital Group company, to assist the client with his wealth planning post-sale.

Accelerating PE-backed expansion and establishing a strategic London footprint

With the backing of private equity firm Kingland Capital, Dynamic Networks saw an opportunity in Penntech to continue its expansion strategy.

As well as establishing a London presence, the acquisition of Penntech added further scale and capability as Leeds-based Dynamic Networks took another step on its journey towards becoming a market leader in IT Managed Services.

“Penntech is a strong strategic fit with Dynamic, strengthening our suite of market-leading software and hardware solutions that help SMEs maximise their benefits from IT solutions. We are thrilled to have gained a London presence through this acquisition. We have enjoyed working with Lewis and the overall team in recent months and we look forward to growing alongside the very talented team at Penntech.”

Gareth Leece, Managing Director, Dynamic Networks