Hightower Inc. Sells for $410,005.96 in cash

After 24 years in business, leading Chicago IL Sage partner Hightower Inc. suddenly closed their doors in late March 2012.

The remains of the company appear to have been actively shopped with the winning bidder being Livingston NJ based  SWK / SilverSun Technologies.

Because SilverSun (corporate parent of SWK) is a public company we get to peek at the exact price a 24 year old one-time industry leading Sage partner such as Hightower Inc. fetches on the open market.

Based on the press release by SilverSun (the acquirer and corporate parent to Sage partner SWK) the 2011 Hightower revenues appear to have been about $ 3,000,000.

Other goodies disclosed in the purchase agreement?

How about an apparent IRS liability of $120, 011.92 (of which 1/2 seems to have been paid by SilverSun and 1/2 by Hightower Inc shareholders as part of the purchase agreement). Consulting agreement for shareholder Robert Nordin stipulating that he will consult for up to 8 hours a month at no cost (with his rate being $150 for excess hours).  Shareholder Jeffrey Rosengarden snagged a $1,850 monthly consulting agreement terminating in June 2015. The third shareholder, Brian Dunn, is not mentioned as receiving any consulting contract.

Full details follow.

According to the 8K just filed, SilverSun/SWK paid $ 410,005.96 in cash for Hightower Inc. assets.

This, according to a prior press release, included 870 Sage ERP customers and 700 enhancement customers. There’s no indication whether the customers were under any type of recurring  maintenance plan.

Doing some quick math that’s about $261.15 per customer – although it’s important to note the value of an enhancement customer is likely less than the value of a Sage ERP customer.  My division of value is admittedly imprecise and likely not a fair picture of what a typical ERP customer might fetch.

SilverSun indicates they expect the purchase to add about $3,000,00 in revenues (based apparently on Hightower’s 2011 revenues).

SilverSun 8-K

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Comments

  1. Ouch.

  2. FYI – it’s Nordin, not Nardin. Here is Rob’s linked in profile http://www.linkedin.com/pub/robert-e-nordin/5/26b/a51

    Rob is a very nice guy and this turn of events makes me sad. I wonder how this came to pass?

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