IT companies for sale

The category covers businesses with employees, clients and contracts — not a single consultant selling their own hours. The key question is how much of the revenue is recurring. Operations and service agreements, hosting and licences billed monthly or yearly are worth far more than hours and one-off assignments that have to be sold again each time. Ask for revenue split between fixed agreements, hourly work and resale of hardware and licences over the last three years.

Then look at client concentration. If the five largest clients account for a large share of revenue, the risk is high if just one of them switches supplier after the change of owner. Check who holds the client relationships. If the owner knows every client and handles the difficult cases, plan for a long transition. If the relationships are spread across several employees, the business is easier to take over.

IT companies with employees are usually priced on operating profit. Sitavo’s indicative range is 3–5 times profit (EBITDA: earnings before interest, tax and depreciation, after a market salary for the owner), cross-checked against 0.5–1.2 times annual revenue. Fixed operations and service agreements and employees who carry the client relationships push the price up. High client concentration, a large share of hourly work and dependence on the owner pull it down. These are general market ranges, not a valuation of a specific business. Use the price estimate and the market data for the category.

• Revenue split between fixed agreements, hourly work and resale of hardware and licences.
• Contribution margin on each type of revenue — resale often carries a thin margin.
• Client mix: how large a share the biggest clients represent.
• Payroll costs and billable time per employee.
• Staff turnover and how long key people have been with the business.

• Client contracts: term, notice period, price adjustment and change-of-control clauses.
• Data processing agreements with clients and the list of sub-processors under the GDPR.
• Information security requirements set by clients, for example under the NIS2 rules, and whether the business meets them.
• Infrastructure: own hardware, data centre and cloud agreements, and when they expire.
• IP rights to code and tools the business has developed itself.
• Partner status with vendors such as Microsoft, and whether it survives a change of owner.
• Certifications: which belong to the company and which are personal.

Client lists and contracts are confidential, so sellers usually share them in a data room behind an NDA. See also the pre-purchase checklist.

In an IT company, the employees are a large part of the value. In an asset purchase, staff transfer on their existing terms under the Danish transfer of undertakings rules, and in a share purchase their employment simply continues in the company. Consider retention agreements with the most important people, and talk to them early. Clients often need to be informed, and some contracts require the client’s consent on a change of owner. Plan the handover of access rights, domains, monitoring and documentation so operations never stop for a single day. Read more in the handover guide.

IT companies are often bought with a mix of equity, bank loans and vendor financing, and an earn-out tied to the fixed agreements after the takeover can share the risk. Sitavo does not provide financing. Messaging sellers and making offers is free, and price and terms are agreed in the deal workflow. The purchase price is paid directly to the seller — Sitavo never holds the money. See also SaaS businesses, digital services and service and consulting businesses for sale.