Portfolio Updates

Takeover announced for Nasstar

The recommended cash offer for Nasstar (a provider of hosted IT services to UK SMEs) from GCI, a leading consolidator of IT service providers in the UK, has completed. The takeover came at a 15% premium to the prevailing share price and represented multiples of 2.5x and 11x historic revenues and EBITDA respectively, and a free cashflow yield of 5.2%.

The Takeover provided Kestrel with a full exit from its 20% holding in Nasstar. Click here to read our case study on this investment.

Kestrel Insight
The provision of IT services is a competitive market with participants typically differentiating themselves via customer service levels. Technical change is ever present and Nasstar’s traditional method of delivering IT to customers by a hosted desktop will transition towards pure cloud services over the next five years. This involves opportunity but also risk, cost and investment. We share management’s view that this migration is best undertaken as part of a larger organisation who can share the burden of these investments. As one of the largest Microsoft CSPs in the UK, GCI has the critical mass to facilitate this transition and is a suitable home for Nasstar.


Kestrel’s Portfolio Updates should neither be construed as investment research, nor the provision of investment advice, nor a recommendation. This article should be viewed as short term commentary only based on the latest economic statistics, company results or information on upcoming releases or events. It is only a brief unsubstantiated summary of Kestrel’s opinion on such information as at the date of publication and no reliance may be placed upon any contents of this article by the recipient.

Back to News