CGL – A Deal Breakdown

September 23, 2015

Every month we look at a Bluebox Deal, in detail, breaking down what happened and what Bluebox did to get the deal over the line. This month we’re looking at CGL:

The Company
CGL was founded by Bill Ballard and has grown to become one of the UK’s leading providers of print management solutions to universities, local government and other commercial clientele. The business developed innovative software that managed all stages of the print management cycle from order to sale.

Reasons for sale
After a lifetime of hard work, the owner wanted to reap the rewards of hard labour. At the same time, ensure the ongoing success of the CGL business by identifying an acquirer that would be able to capitalise on the significant opportunities that were presenting themselves.

The Deal Process: From Start to Sale
Bluebox held five or six management presentations to interested buyers and received offers from two. We moved forward with a company called KPM as this was a good strategic fit. Bluebox drove pricing, as KPM initially came in with an offer much lower than their final price. After careful negotiations, and countless discussions, Bluebox managed to persuade KPM to raise their offer in order to avoid losing CGL to the other company who previously out in an offer.

Valuation Achieved
The key to this deal was negotiations. We negotiated on the behalf of Bill on a number of issues, notably on contract issues with certain members of staff. We discussed the proposed contracts with all parties involved and managed to come to a solution which pleased everyone.

Terms of Deal
In addition, Bluebox structured the earn-out so that Bill had downside protection, ensuring a minimum payment was made during the earn-out period and also had the potential to earn an additional sum if certain targets were reached. This was important as at first, the buyer was proposing that there be no minimum payments during the earn-out period, leaving Bill exposed to not receiving a valuation he deemed acceptable.

The Clients views
Bill remained at the company as a consultant during the company’s transition. He commented, “When I first engaged with Bluebox, I was hesitant as to the benefits of using an advisor to firstly, find a buyer for my business and secondly, to get a deal over the line. However, now that the deal has completed with KPM, I can honestly say that the finer negotiation points handled by Bluebox and their overall management of this process has been nothing short of first class. I would be delighted to recommend Bluebox’s services to any entrepreneur contemplating the sale of their business”.

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