Our client is a professional services firm that has an established private and secured web government hosting contract housing data for the United States Department of Health and Human Services via a third party intermediary. Our Client is specifically interested in selling this particular Contract. The government hosting contract is ideal for a “Strategic Buyer” interested in entering, expanding or dominating the Government Health-Tech hosting and professional services space. The contract began on or about August 18, 2015, for a five (5) year term with an option to renew for up to an additional five (5) year term. The agencies have spent over $12m (USD) for materials to be housed at this Private Cage Environment and will not be moving out. The government hosting contract does not require any “seats” to be provided and is a pure arbitrage play. This is an ideal contract for new or established Government Contractors to build on contractor and grantee performance metrics.
HIGHLIGHTS OF OPPORTUNITY
Private hosting solution servicing Medicare and Medicaid
The environment has already been built out and is currently up and running, income is being generated on a monthly basis.
Professional Service Agreement and Expansion Clause built into existing contract
Established Professional Service Agreement requiring 65% to 100% pre-payment on each order depending on the type of service. Professional Services hourly fee is set at $185.00 per person per hour. The existing government hosting contract has a Right of First Refusal for an additional 24.8% cage space within the contract leading to increased net revenues. In Year 1 our Client obtains more than $430,000.00 worth of Professional Consulting fees.
Pure arbitrage play for the government hosting contract
The established contract provides an annual net income of $233,494.63; with a total potential lifetime net profit value of $2,767,050.63 on $18,211,568.47 of gross revenues. The acquirer is not required to provide any ancillary services this portion of the contract, it is a pure arbitrage play. Any ancillary services would be an additional income to the aforementioned income.