November 1, 2016
Bluebox recently advised on the high profile sale of Moorfields Pharmaceuticals, the commercial pharmaceutical business of the Moorfields Eye Hospital NHS Foundation Trust, to the ophthalmic manufacturer, Rayner Pharmaceuticals Limited. The deal was particularly valuable in terms of ‘lessons learnt’. It provided our team with real insight into selling businesses for public sector organisations, and the NHS in particular.
It occurred to me that there is a lot of negative press about process, policy and priorities in the public sector, but we experienced little of this. My team and I saw, first-hand, the excellent governance in a major NHS Trust and concluded that there a number of really important aspects of this governance and project management ethic that could be applied to private clients.
Specific points on which we believe that private sector vendors could learn from NHS practice are as follows:
1. Assessing objectives and considering options using a formal framework
In considering the potential sale of an NHS asset, governance processes meant that the Trust had to go through an extensive ‘options assessment’ exercise. All options were considered and an assessment of each option was made. It was a time consuming process, but a process that did point to the right solution when options were considered against a set of previously determined objectives.
While this process may have been arduous, it was very valuable in laying out exactly what the objectives of the Trust were and what the key qualitative and quantitative benefits were. After defining these objectives, and scoring and weighting each of the options against a set of benefit criteria, decisions were taken that were easy to rationalise and benchmark.
Setting out the qualitative and quantitative objectives of each of the stakeholders at the start of the exercise, and understanding the key ways that these can be measured, and the importance of each, is critical to allow businesses or business owners to maximise value and the speed and efficiency of an exercise. As part of our unique Blue Diamond programme, we have since worked through a similar options appraisal process with a number of clients in the private sector and have found it to be very helpful.
2.Managing business and transactional reputation risk
The Moorfields Eye Hospital brand is, arguably, the leading brand in the world of ophthalmology. A key objective of the Trust was to mitigate any reputational risk whatsoever from this transaction. It is not often one of the most significant priorities for a private company transaction, but given the benefits that accrue to a smooth deal, my team believe that it should be.
Performing due diligence on potential acquirers and their intentions allows a vendor to confirm that the offers on the table are ‘deliverable’ and match the key objectives of the stakeholders. In addition, insisting on specific clauses around the onward sale of the business being sold in a short period post transaction (often referred to as an anti-embarrassment provision) provides the vendor with comfort that they will be compensated should the buyer look to make a ‘quick buck’ soon after the transaction.
3.Getting specialists involved early
An issue very relevant to transactions in the public sector is pensions. The NHS pension scheme, and particularly the transfer of employees from the public to private sector, was not simple in this transaction and required the help of real experts in their field. Not many private sector deals require such specific pension advice, but the lesson learned is that by getting specialist advice early we were able to manage issues on a timely basis and ensure that the timetable did not slip. Specialist advice, however, does not have to be specific to pensions. Since this deal has completed, a number of Fit4Sale Clinics have been added to the Blue Diamond Programme which help in the way described above. We have introduced further clinics, provided by our Delivery Partners, in areas such as pensions, tax, structuring, intellectual property and environmental management to help at an early stage in the transaction process and ensure there are no delays.
4.Delegating authority where possible
The governance processes in the public sector are strict, extensive and robust. The Board are able to dedicate time to them at the outset of a sales process, but as the transaction moves towards due diligence and completion, it is important to recognise that momentum is key, and waiting for monthly Board meetings to make decisions would simply delay a process and lose momentum. Delegated authority, to trusted individuals and committees was a way to ensure that the transaction could flow smoothly without conflict.
Working alongside (and for) the Moorfields Eye Hospital Trust was a privilege for Bluebox and the fact that we have been able to take some lessons from the exercise is another reason why we were delighted to have been mandated on such a prestigious mandate.
For further details about the transaction, or Bluebox, please contact Nick Wallis, Associate Director.
020 7872 4500
“We were delighted with the services that Bluebox offered us. Bluebox’s attention to detail through their Diamond Programme ensured that we were well prepared for when the business was taken to market and that the sale process itself was managed expertly.
We challenged Bluebox with finding the right strategic buyer and thereafter negotiating a deal that met our requirements. In helping initially to identify and to secure the deal with Mountville Mills they accomplished just that. Communication throughout was excellent and professional, managing each stage of the process. I would have no hesitation in recommending Bluebox to any corporate shareholder or private business owner looking to divest their business.”
Richard Millward, Former Client
“We were delighted with the services that Bluebox offered us. Bluebox were challenged with finding us the right strategic investor and, thereafter, negotiating a deal that met our complex requirements. In identifying and securing the deal with LGC they have done exactly that. The process itself was efficient and smooth, largely due to the excellent communication from the Bluebox team, who also demonstrated excellent experience at managing a very engaging auction process. I would be delighted to recommend Bluebox to any corporate shareholder or private business owner looking to divest a business.”
Helen Dickinson, Former Client
It has been a real privilege working with the team at Bluebox over this last year or so. Bluebox’s attention to detail ensured that we were well prepared for when the business was taken to market and the sale process itself was managed expertly. Starting the process, I had no idea exactly what this would entail and the volume of work that has been produced by everyone and the result reached today is nothing short of brilliant.
Hugh Morris, Former Client
We are delighted with the services that Bluebox was able to offer. They showed an intimate knowledge of a deal cycle, managed a tight auction process and were highly communicative from the start. I would happily recommend Paul and his team to business owners contemplating a sale of their business in the next 24 months. Experience is key and this has paid off for us.
Laurence Seward, Former Client
Aligning ourselves early with Bluebox, and entrusting the team to guide us through their process proved to be a highly rewarding investment from all viewpoints. Bluebox’s support significantly enhanced both the value of our business and its ‘saleability’. I would highly recommend Bluebox to business owners contemplating an exit in the next two years. The earlier the engagement the better so far as I am concerned.
Mike Minett, Former Client
We began working with Bluebox in early 2015 through their Blue Diamond Programme, as we were contemplating an exit. We found that the process focussed our minds on the key areas of growth in the business, and prepared us well for the inevitable rigours of due diligence. During the sale process itself, the advice offered by the Bluebox team was invaluable. We found them to be helpful, straightforward and honest.
David Stokes, Former Client
When selecting our adviser, it was extremely important that they had access to international buyers and were experienced in cross-border M&A. The team at Bluebox proved to be invaluable by identifying a strategic acquirer from America who was not known to us and by negotiating an excellent deal for all parties. I was also impressed with the process management from Bluebox, which ensured that the deal was closed in a timely fashion.
Jeff Weinstein, Former Client
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.
Bill Ballard, Former Client
Bluebox worked closely with us over the following six months and helped us to implement some key initiatives which made InferMed a more attractive acquisition target. Once we decided to sell the business, the Bluebox team were very diligent in ensuring that no stone was left unturned. They negotiated expertly on our behalf to ensure we got the best deal possible.
Alan Montgomery, Former Client
The pre-sale planning programme that we signed up for with Bluebox made us develop our strategies and focus on the bigger picture. It proved to be a very rewarding investment from all viewpoints and significantly enhanced both the value of our business and its ‘saleability’. I would highly recommend Bluebox to business owners contemplating an exit in the next two years.
Nigel Parsons, Former Client
I have experienced first hand the value that can be created through highly structured pre-sale planning. It amazes me that it is not something that everyone does. It is so disappointing to see around 90% of transactions collapse before they complete and pre-sale planning will not only enhance your price, but also significantly enhance your chance of a closed deal.
James Caan, Investor
We worked incredibly closely with our advisers who provided expert knowledge of the sale process with which we were not familiar. We were truly delighted with the results.
Marten Nielson, Former Client
We appointed advisers to manage the sales process after we had received a number of unsolicited approaches for the business. I was incredibly impressed by the immense value that could be created by expertly negotiating with a group of already interested parties.
Paul Duckworth, Former Client
I was delighted with the service that the team offered and their real attention to detail. The deal was not without its complexities and it was reassuring to have such experienced advisers assisting me throughout the negotiations.
Peter Bennett, Former Client
Truly delighted with the way my sale process was managed. The fact that the team I worked with achieved such a great multiple is testament to their experience and their ability to create some true competitive tension.
James Averdieck, Gü, Former Client
The team at Bluebox provided invaluable support in negotiating this complex transaction. Their access to international purchasers, and exceptional knowledge of cross border M&A ensured that the deal was concluded efficiently, achieving a highly successful outcome for us all.
Jon Parslow, Former Client
“We selected Bluebox after a fairly long round of evaluating potential advisors because of their scientific, yet challenging approach to maximising value. During our initial meetings they showed us how far short of “ready” we were and consequently we completed more preparation in the early stages which meant we were equipped for what was to come. We were delighted with our choice of Corporate Finance partner. I do not hesitate in recommending Bluebox for any SME to consider.”
Simon English, Former Client
Bluebox provided invaluable advice in managing the negotiations with incoming investors. Their skills in handling these discussions were evident from the outset and the vital interface that they provided between the incumbent team and the incoming investors was truly beneficial.
Henry Braham, Former Client
Bluebox have a professional, dynamic and experienced team that is greatly assisting me with my focus on my exit within the next 24 months. Their structured approach is very refreshing and their ‘Blue Diamond’ programme is adding immense value.
Matt Evans, Former Client
The team at Bluebox provided me with a seamless service from the start of the engagement until our deal was completed. Attention to detail was commendable and their understanding of corporate M&A very impressive. I could not recommend them highly enough.
Victor Lewis, Former client
Having tried to sell my business previously – and failed – I was only too aware of the importance of pre-sale planning. This is a talented team offering a service that most people find out about, but too late.
Simon Hulme, Former Client
Bluebox are a quality outfit. Their access to International acquirers and relationships with the highest quality domestic investors was impressive. My shareholders and I received excellent service from start to finish and it was refreshing to be dealing with a senior team throughout the sale exercise.
Michael Clapper, Former Client
I cannot recommend the team at Bluebox highly enough. Their expert guidance throughout the entire sale exercise resulted in my shareholders securing an excellent deal with which the entire team was delighted.
Mark Rodol, Former Client
I’m really pleased with the service Bluebox provided. The team demonstrated excellent knowledge of the process to follow and led negotiations for the hospital in a way that allowed us to ensure we received appropriate value whilst focusing on reputational risk. Communication and service were of a very high standard.
Steven Davies, Former Client
With Bluebox’s expert advice we were able to find the right buyer that will benefit our business strategically. We’re delighted with the outcome and look forward to starting our new chapter
Clive Hillier, Former Client
The advice offered by the Bluebox team throughout the process was invaluable to the shareholders. We strongly believe that participating in Bluebox’s pre-sale planning programme was a significant driver behind the success of the deal. Their project management and negotiation skills throughout the sale process itself resulted in an exceptional deal being delivered to all parties involved.
Harpal Singh, Former Client