IT founder Ann Budge nets £40m after sale of company

One of Britain's fastest growing private companies specialising in information technology has been sold for about £70m, netting its founder a £40m fortune 20 years after setting up the business.

One of Britain's fastest growing private companies specialising in information technology has been sold for about £70m, netting its founder a £40m fortune 20 years after setting up the business.

Ann Budge, the chief executive of Newell & Budge, has sold her IT company to the quoted French group Sopra but will stay on to run the enlarged group's UK operations.

Ms Budge, 57, is a former IT manager with Scottish & Newcastle, the brewer, and still lives in Edinburgh where Newell & Budge has its headquarters.

Since buying out her founding partner, Alison Newell, in 2001, she has continued to build the business up, offering IT systems-building and integration services to a range of companies mainly in the financial services and telecoms industries as well as government departments.

The company is expected to have sales of up to £38m this year. Although the price tag for the deal was not revealed by the French buyers, analysts believe it is likely to have been sold for about 1.8 times it sales.

Ms Budge owns about 60 per cent of the company's share capital, according to the latest filings at Companies House, while 3i, the venture capital fund, has a 28 per cent stake. The rest of the company is owned by the management team.

"I wanted to find a partner that would allow it to continue to grow the business," said Ms Budge last night.

"There is not a huge significance in the timing of the deal. We were not looking to sell the company but there is a lot of activity in the market. We were getting lots of approaches."

Newell & Budge has built up a strong IT service business in the north of the UK while Sopra's UK operations are based mainly in the south of England. Newell & Budge has a workforce of 600 people and through a subsidiary, Momentum Technologies, it also employs 100 people in its offshore base in Delhi. The combined operation will have sales of about £60m.

Newell & Budge was advised on the deal by the corporate finance team of Deloitte & Touche.

Simon Russell, a technology M&A specialist at Deloitte, said: "Many European and international IT groups are looking at the UK as a relative bright spot for technology spending. Leading market positions cannot be established overnight, hence acquisitions are a necessity for market entry or expansion. Businesses with strong positions in key markets such as financial services, telecoms and government are of particular interest, as acquirers look for growth through vertical focus and niche offerings."

He said consolidation was gathering pace within the software and IT services market, with acquirers looking for both scale and specialist expertise.

The UK sector is seeing significant M&A interest from major international groups and private equity funds, with deal activity in the IT services and software industry up by 46 per cent in 2005 compared with 2004, according to figures from MergerMarket.

"We built the business by always taking the long-term view," said Ms Budge. "We have built relationships with customers. Our core values include integrity and putting customers first. We have a well-balanced business, 40 per cent with central government and 40 per cent with the financial sector."

Sopra said it intended to brief the Paris stock market about the deal this morning with completion expected by the end of the month.