Getting the deal done - A showcase of recent deals from our Corporate Finance team - Quantuma

 
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Getting the deal done - A showcase of recent deals from our Corporate Finance team - Quantuma
Getting the
    deal done
   A showcase of recent
deals from our Corporate
           Finance team

                  April 2021

           www.quantuma.com
A record breaking period
    Earlier this year our Corporate Finance team
    completed a record-breaking eight transactions in
    quick succession, at a combined value of over £130m.
    Key themes
    Exits were a reoccurring theme throughout the transactions.              Disposal to            Disposal to PE
    These included the sale of Collaborative Project Management
                                                                          overseas acquirer        backed business
    Services (CPMS) to French engineering group Egis, which
    saw YFM Equity Partners exit the business, and the partial
    shareholder exit of professional services provider of Microsoft
    identity and cyber security solutions ThirdSpace, which also
    included an investment from TiG, backed by BGF.
    Management buyouts (MBOs) backed by private equity have
    proved a popular exit strategy in recent weeks, with Quantuma
    advising on the disposal of facilities management business
                                                                           Disposal to a PE         Lead adviser to
    Pareto FM in an £18m MBO supported by NVM Private Equity,
    in addition to the MBO of data and network security specialist
                                                                            backed MBO               MBO acquirer
    Phoenix Datacom, backed by private equity giant LDC.
    The team also completed the disposal of compliance training
    consultancy Compliancy Services to an MBO backed by Ethos
    Partners. As well as this, they advised on the sale of digital
    content platform and publisher Dezeen to Danish media
    company JP/Politiken Media Group.
    In addition, our Transaction Services team completed their        Disposal and vendor assist
                                                                                                         M&A
    first vendor due diligence for data centre owner and operator         to PE backed MBO
    Amito’s £38m transaction with investment from Harwood
    PE. We also provided financial due diligence for Herida
    Healthcare’s acquisition of Select Medical.
    Get in touch
    To discuss how we advise businesses looking to sell, acquire
    and raise working capital please get in touch with a member
    of our team. You can find contact details at the end of this                                      Disposal to
    document.                                                           Vendor Due Diligence
                                                                                                   overseas acquirer

2                                                                                                  Quantuma | Getting the deal done
A word from Ian Barton and Mark Lucas

    Quantuma has gone from strength-to-strength           This has been the busiest period that Quantuma
    in the last 12 months and following our merger        has ever had for completing corporate finance
    with K3 Capital Group last year, we have added        transactions. Driven by entrepreneurs anticipating
    further depth to our corporate finance offering.      changes to Capital Gains Tax in the Chancellor’s
                                                          Spring Budget, we have seen incredible appetite
    I was delighted to see KBS recognised as the          from both buyers and sellers.
    most active adviser in the South East in 2020 and
    these eight deals further underline that status for   Whilst no change materialised from the Budget,
    the Group as the leading adviser with 52 deals        there remains an expectation that changes will
    done in January and February of 2021.                 be forthcoming, and we continue to experience
                                                          growing activity levels despite the surge of
    Across the K3 Group we are continuing to invest       deal completions in the last few weeks. After an
    in our ability to support businesses across all       inevitable pause in deals in the first few months
    regions and sectors through significant periods       of the pandemic, we have seen accelerating
    of change, with specialities in market mapping,       activity since last autumn and the deals market
    debt advisory and tax advisory in the first half      has bounced back stronger than ever, with new
    of 2021.                                              types of transactions coming to the fore.

                                                          Deals are happening at pace and our pipeline is
                                                          strong, so we expect continued deal activity for
                                                          the next few months ahead.

                           Mark Lucas
                           Mark Lucas                                           Ian Barton
                           Managing Director                                    Managing Director,
                           Corporate Finance Lead                               Corporate Finance
                           K3 Capital Group Plc

3                                                                                                             Quantuma | Getting the deal done
The
deals
Ian Barton                                  Phillipa Robinson
                   Managing Director,                          Director,
                   Corporate Finance                           Corporate Finance

The client                                                                         The outcome
Founded in 2003, the Hitchin-based company Compliancy Services,                    After undertaking a vendor assist review and report, we then used our
which provides compliance consultancy and regtech offerings to a range             in-depth understanding of the client’s needs and solid connections with
of regulated financial services clients, were actively planning for their          private equity funders to successfully facilitate a transaction backed by
next phase of growth. The company, which manages client’s ongoing                  Ethos Partners LLP in less than three months. The sale will enable the
compliance and regulatory obligations and assists businesses in becoming           company to accelerate its growth whilst continuing to work with its clients
authorised by the Financial Conduct Authority (‘FCA’) and the Prudential           as a trusted compliance partner, delivering cost-effective solutions as the
Regulation Authority (‘PRA’), instructed us to assist and advise on a disposal     regulatory landscape continues to increase and evolve.
via a private equity backed MBO.
                                                                                   It took significant effort from all sides to complete this transaction in the
                                                                                   agreed timescale, especially during a national lockdown, and we look
What we did                                                                        forward to subsequent news of the future growth of the business in the
                                                                                   coming years.
Our specialists, Ian Barton and Philippa Robinson, immediately recognised
the need to identify a private equity partner who could work with the
current stakeholders to help shape the future of the company. We
initiated a seamless process where we efficiently matched a buyer                  Ben Mason, non-executive director at Compliancy Services,
which suited the company’s approach and values in addition to working              commented:
with the shareholders to design a resilient structure for the business to          “We worked incredibly closely with the Quantuma’s team to secure the sale of
move forward into its next phase of growth. This approach allowed for              our company to an MBO backed by Ethos. This process was made seamless
the retirement of company founder Iain Stephen, as well as the equity              by Ian’s comprehensive knowledge of potential buyers, which meant he was
incentivisation for the majority shareholder Ben Mason and the new CEO             able to efficiently match us with a buyer that suited our approach and values.
Phillip Naughton, whilst delivering a partial exit.                                Ian and Philippa supported a process that facilitated a sale in less than three
                                                                                   months from when we first met Ethos. We could not have found our buyer or
                                                                                   completed the process without Ian and Philippa’s expert assistance.”

 5                                                                                                                                    Quantuma | Getting the deal done
Ian Barton                                 Adrian Howells
                   Managing Director,                         Director,
                   Corporate Finance                          Corporate Finance

The client                                                                        The outcome
Established in 1984, Phoenix Datacom is a data and network security               We are delighted to have supported Phoenix Datacom, LDC and the team
specialist based in Aylesbury which helps organisations to build, validate        throughout the deal, which sees former UK President of BT Global Services
and optimise their networks and secure business critical assets. The              and CEO of Alternative Networks, Mark Quartermaine, join as non-executive
company has built a strong customer base over the years, working with             chairman. The deal is a testament to the company’s resilience and drive to
a range of financial institutions, network operators, media businesses,           continue to grow the business at the same time as executing the buyout
broadcasters and public sector organisations across the UK.                       and we look forward to seeing the business’s successful growth story.

In the year ending 31 March 2020, the business reported revenues of more
than £20 million – an increase of 48 per cent over the past three years. Our
dedicated team, led by Ian Barton, Adrian Howells, and Reuben Taylor,             John Carson, CEO of Phoenix Datacom said:
were introduced when the company sought a buyout in conjunction with a            “Throughout the transaction, we really benefited from Quantuma’s extensive
potential investment, to expand its suite of hardware and software products       experience and fast responses. Working with Ian and Adrian was an absolute
and explore complementary acquisitions.                                           pleasure – their pragmatic approach and very positive attitude to keep our
                                                                                  deal on track was particularly beneficial. This is especially the case given with
                                                                                  the challenge of not being able to meet face-to-face for most of the deal due
What we did                                                                       to lockdown, and their support, friendship and professionalism were key to
We supported Phoenix Datacom’s management team in developing its                  delivering a successful outcome.”
business plan and were able to secure an investment from private equity
firm, LDC. Our expert team successfully structured a beneficial deal for
all parties involved with the client praising our extensive experience and
pragmatic approach which kept the deal on track given the challenges the
lockdowns presented.

 6                                                                                                                                   Quantuma | Getting the deal done
Ian Barton                                Fardeen Nariman
                   Managing Director,                        Director,
                   Corporate Finance                         Corporate Finance

The client                                                                       The outcome
Oxfordshire-based Pareto FM was founded in 2014 by the current managing          We are delighted to have supported two of the founding shareholders
director Andrew Hulbert and has built a strong reputation in the industry        in successfully exiting the business, as well as finding Andrew and the
as a people business, with a focus on customer service, diversity and staff      management team the right partner in NVM that will help the business
engagement.                                                                      continue its impressive growth.

Pareto was set up as an antidote to large, inflexible service providers,         It is a strong validation and testament to the business that has been built
delivering a tech-enabled suite of customer-focused solutions. The               and led by Andrew and his team and the injection of this investment makes
management team has been highly successful at building a blue-chip               Pareto a significant force in the industry. We look forward to following its
customer base and boasts a market-leading Net Promoter Score of 75, as           next phase of development.
well as being recently featured in the Sunday Times Fast Track 100.

What we did                                                                      Andrew Hulbert, managing director at Pareto added:
                                                                                 “It was important to Pareto that we found the right partner to go on this journey
Our expert team, led by Fardeen Nariman, Ian Barton and Reuben                   with us. Quantuma worked closely with our senior management to support
Taylor, acted as lead adviser to facilitate an MBO which will enable the         us throughout the whole process, offering guidance, advice and support
management team to not only continue to expand organically, but also take        day and night. We are delighted with the deal we have structured which will
advantage of depressed asset pricing as a result of the pandemic, which          enable Pareto to better support its clients and team members as well as grow
has seen a number of less agile FM businesses struggle to tilt their business    further in Facilities Management. The injection of investment makes Pareto
models.                                                                          a significant force and we look forward to seeing it continue on its journey to
We recognised the importance of finding the right partner to go on               transform the industry.”
this journey with Pareto and supported the company’s shareholders in
developing its business plan which helped secure an investment from
private equity firm, NVM, who valued the business at £18 million.

 7                                                                                                                                  Quantuma | Getting the deal done
Mark Lucas                                    Fardeen Nariman
                  Managing Director and                         Director,
                  Corporate Finance Lead                        Corporate Finance
                  for K3 Group plc

The client                                                                          The outcome
ThirdSpace is the UK’s leading professional services provider of Microsoft          We successfully structured and delivered the deal for all parties securing
identity and cyber security solutions. The company, which has offices in            some realisation of value as well as finding a new home for the business
Oxford and South Wales, designs, implements and supports state-of-the-art           in TiG, a company which we believe is the right strategic partner for the
identity, access and security solutions. As an eight-time Microsoft Partner         businesses long-term plan.
of the Year winner, Thirdspace has helped organisations meet complex
security and compliance obligations, while improving collaboration between          As part of the deal, ThirdSpace’s CEO, will join the TiG board as chief
staff, partners and customers. The combined group now boasts over 210               strategy officer whilst the sales director is also set to join the board as chief
employees providing advanced Azure transformational solutions, data                 sales officer to drive the company’s ambitions to become the UK’s leading
analytics, 24/7 managed services, as well as the latest Sentinel and SOC            Advanced Digital MSP.
solutions to identify and respond to critical security threats.

                                                                                    Neil Coughlan, CEO at ThirdSpace said:
What we did
                                                                                    “I have worked with Mark Lucas, Fardeen Nariman and the Quantuma team
Our expert team, led by Mark Lucas, Fardeen Nariman and Richard Hill,               through a successful MBO and now the transaction with TiG. Every time, they
were introduced to act as the exclusive lead adviser to the shareholders            have delivered and made the process as seamless as it can be – they are
who were seeking an investment which would help realise some value. We              multi-talented financial professionals and guides.”
swiftly engaged in the transaction, supporting the company in developing
its business plan and were subsequently able to secure an investment from
TiG, backed by BGF.

 8                                                                                                                                      Quantuma | Getting the deal done
Mark Lucas                                     Fardeen Nariman
                   Managing Director and                          Director,
                   Corporate Finance Lead                         Corporate Finance
                   for K3 Group plc

The client                                                                            The outcome
Established in 2012, London-based CPMS has developed into a multi-                    We are delighted to have been able to assist YFM on securing a successful
discipline infrastructure and consulting business offering professional               exit and the team at CPMS in joining Egis. This acquisition brings together
services in enterprise asset management, project management, engineering              two complementary businesses and will give CPMS a strategic edge to
and construction in the rail, aviation and highways industries. The company           strengthen their existing portfolio in the UK.
now has a turnover in excess of £8 million and over 70 employees. In the
last eight years, the business has supported over £1 billion of investment in
the UK rail sector.
                                                                                      Mat Baine, managing director at CPMS, added:
                                                                                      “Mark and Fardeen have delivered a great result for YFM and the business.
What we did                                                                           They ran a smooth process with no surprises. Both Egis and CPMS have similar
                                                                                      cultures, with each of us striving to provide high quality service offerings to our
Our team, led by Mark Lucas and Fardeen Nariman, were instructed to                   clients, as well as offer growth and career development opportunities to our
provide lead financial advice to the management team and shareholders                 employees.”
of CPMS on the sale of their shares to French engineering group Egis. The
investment has also enabled YFM Equity Partners (YFM) to exit the business.

Egis has been involved in several projects in the UK and Ireland in recent
years, including the Dublin Luas tram, the modernisation of the London
Underground (tubelines), the extension of Midland Metro network, the
upgrade of both the Irish and British rail networks’ signalling systems and
acting as a consultant to HS2. More recently, the engineering group has
worked on the design of the Cambridgeshire Autonomous Metro and the
West Yorkshire Area Transport Plan.

 9                                                                                                                                        Quantuma | Getting the deal done
Adrian Howells
                   Director,
                   Corporate Finance

The client                                                                     The outcome
Digital content platform and publisher Dezeen, is a popular and influential    We successfully delivered this transaction in a matter of weeks which
architecture and design magazine. Dezeen has grown rapidly since its           resulted in a mutually beneficial outcome for both the sellers and the
launch in November 2006, with its audience growing year on year – by 2019      buyers. It is not often that we see such a complimentary match between
the average number of monthly visitors had risen to three million.             parties and there is much excitement and opportunity for the future.

                                                                               The deal, which marks JPP’s first acquisition outside of Scandinavia and is
What we did                                                                    the latest step in its international expansion, will preserve Dezeen’s editorial
                                                                               independence. It will also help to drive the brand’s ambitious growth plans
Our advisory team, led by director Adrian Howells, were instructed as          while retaining its position as the world’s most popular and influential
the lead adviser on the company’s sale to Danish media company, JP/            architecture and design magazine. As part of the acquisition, founder and
Politikens Hus Media Group (JPP). We oversaw the entire transaction            editor-in-chief Marcus Fairs will serve as CEO in the UK.
process, including helping to prepare a business plan and financial forecast
for the next three years, negotiating terms and price and overseeing the
implementation of a revised enterprise management incentive share option
scheme for key management.                                                     Marcus Fairs, founder and editor-in-chief at Dezeen, said:
                                                                               “Quantuma were brilliant throughout the process. They made everything easy
                                                                               for us to understand and they were on hand 24/7 to help us get the deal done
                                                                               quickly and successfully. They knew what they were doing and were able to
                                                                               clearly see both what we wanted and what the buyer wanted and were able to
                                                                               skilfully bring the two sides together.”

10                                                                                                                               Quantuma | Getting the deal done
Jonathan Thornton
                   Managing Director
                   Transaction Services

The client                                                                      The outcome
Leeds-headquartered Herida Healthcare is a privately owned pressure case        We successfully advised Herida on their first acquisition resulting in the new
and moving and handling manufacturer. The firm works with clinicians and        group boasting joint revenues of £17m and strong double-digit EBITDA for
professionals to develop products that will enhance both the comfort and        the current year, ending March 2021.
quality of life for patients, especially focusing on mattresses and cushions.
                                                                                In the purchase of Select, Herida has kicked off what is expected to be
Select Medical is a Blackburn based company which supplies, cleans and          an ambitious series of strategic acquisitions by strengthening its core
repairs a wide range of pressure relieving mattresses and cushions. Since       product range and expertise. The two businesses have clear synergies,
2001, the firm has supported front line care workers, the NHS and care          which provides confidence that the enlarged group will go from strength to
homes in the prevention of debilitating pressure ulcers.                        strength in the coming years.

What we did
                                                                                Neil Smith, Chairman at Herida Healthcare, said:
Our dedicated team of professionals provided financial and tax due              “Quantuma provided the financial due diligence for Herida on our Select
diligence to Herida Healthcare on its acquisition of Select Medical.            Medical transaction. I was delighted with the flexibility and coordinated
                                                                                interaction of the team and they met the tight timeframe to close the
                                                                                transaction. Well done and thank you to you all.”

 11                                                                                                                               Quantuma | Getting the deal done
Jonathan Thornton
                   Managing Director
                   Transaction Services

The client                                                                     The outcome
Amito own and operate the largest, most efficient, and secure data centre in   We are delighted to have completed our first vendor due diligence given
Reading, and deliver colocation services through a network of 20 facilities    that our transaction services offering was established just 18 months ago.
across the UK..                                                                The deal, worth £38.7 million, will enable the business to move forward with
                                                                               its ambitious plans for expansion.

What we did                                                                    In Harwood, the business has found the ideal partner to help take it to the
                                                                               next stage of its development, and we look forward to seeing how Amito
Our transaction services team were instructed to provide financial and         progresses with this new support.
tax vendor due diligence to data centre owner and operator Amito on its
minority investment from Harwood Private Equity.

Harwood Private Equity is a leading investor in UK lower mid-market            Ed Butler, CEO at Amito said:
companies. Based in Mayfair, the firm has a portfolio including podcasting     “We are delighted to have successfully secured investment from Harwood
business Audioboom, vehicle insurer Tradewise Insurance Services and           Private Equity and are keen to realise the next phase of our growth strategy.
eyewear brand Inspecs                                                          We are pleased to have had Quantuma supporting us throughout the process.”

12                                                                                                                             Quantuma | Getting the deal done
The team

            Mark Lucas                       Ian Barton                        Jonathan Thornton
            Managing Director and
                                             Managing Director                 Managing Director
            Corporate Finance Lead
                                             Corporate Finance                 Transaction Services
            for K3 Group plc

     07500 585852                     07881 816001                     +44 (0)7918 277329
     mark.lucas@quantuma.com          ian.barton@quantuma.com          jonathan.thornton@quantuma.com

            Phillipa Robinson                Adrian Howells                    Fardeen Nariman
            Director                         Director                          Director
            Corporate Finance                Corporate Finance                 Corporate Finance

     07753 821598                     07725 909852                     07500 372070
     phillipa.robinson@quantuma.com   adrian.howells@quantuma.com      fardeen.nariman@quantuma.com

                                             Valentina Vitali
                                             Director
                                             Private Equity Coverage
                                             Quantuma and
                                             K3 Group plc

                                      07436 033536
                                      valentina.vitali@quantuma.com

13                                                                          Quantuma | Getting the deal done
Part of K3 Capital Group plc

            We’ve merged with AIM-listed
                K3 Capital Group plc.                        Provides a business transfer service          Provides business sale services that
                                                         which utilises extensive online advertising      identify and match the sellers of SME
        The merger will allow us to continue at           including business for sale portals and its       businesses to trade, individual and
        pace to build a global, multidisciplinary        own proprietary buyer database in order to      institutional buyers both in the UK and
      professional services group with significant                match buyers and sellers.                              overseas.
     capabilities in financial advisory, restructuring
      and insolvency, corporate finance, specialist      Typically these clients’ businesses have an      Typically, these businesses have an
     R&D tax advisory and forensic accounting and          enterprise value of up to c.£2 million and     enterprise value ranging from c.£0.5
                expert witness services.                   are engaged in a wide variety of sectors       million to c.£10 million and covers a
                                                         including retail, catering, care, commercial,           broad range of sectors.
         K3 Capital Group includes a range of                   licensed and leisure markets.
       advisory services to SMEs across the UK.

       RandD is a Midlands based, R&D Tax Credit               An execution model for clients                    InTax are a leading tax
      Specialist servicing clients across the whole          mandated through KBS Corporate                     investigations business.
     of the UK. The RandD team possess specialist           whose complexity or value requires a
     knowledge and senior level experience across          service led by directors with a qualified     Their team is comprised of chartered
       the tax spectrum, allowing them to operate                and technical background.                  tax advisers and former Inland
         across a wide range of industry sectors.                                                           Revenue inspectors who have
                                                             A strong track record of delivering          many years’ experience in assisting
      Launched in the year 2000, R&D tax credits           deals to private equity and trade (both        businesses and individuals who are
       are a government initiative to boost the UK          privately owned and listed) buyers in         subject to tax investigations and tax
      economy through rewarding innovation, the              the UK and overseas, typically with                 enquiries of all types.
     company also undertake Patent Box Tax Relief           an enterprise value of between c.£10
            and Creative Industries Tax Relief.                   million and c.£200 million.

14                                                                                                                   Quantuma | Getting the deal done
Restructuring & Insolvency | Financial Advisory | Forensic Accounting & Investigations

Cross-Border Asset Recovery | Pensions Advisory | Corporate Finance | Creditor Services

                                 www.quantuma.com
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