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Partner Piece: M&A ten years on – plus ça change plus c’est la même chose?

April 27, 2022

M&A ten years on – plus ça change plus c’est la même chose?

By Louise Eldridge of Bristows LLP

 

The realisation that it has been ten years since the launch of Bluebox caught me by surprise. I remember, as if it were yesterday, the first Bluebox event hosted from my office, working with Paul and Tracy as we collaborated on those early presentations.

 

Reflecting upon these past 10 years there is no doubt that we’ve lived through enormous changes to the political, socio-economic and global landscape. We have seen the recovery from the effects of the banking crisis, the digital revolution, the polarising effects of Britain’s exit from the European Union, an unprecedented global pandemic and more recently the war in Ukraine.

 

Given the enormity of these events and their various consequences and the numerous less seismic changes in law and regulation, one might think that the M&A landscape might also have undergone dramatic changes during this time but on examination, is the M&A landscape so very different, or it is a case of plus ça change plus c’est la même chose?

 

Ten years ago when selling service focused businesses, often due diligence centred around the use of contractors, the position around IP rights and ownership and whether the business had “got the tax right”. Arguably these issues are still as relevant as ever.  The recent changes to the IR35 rules surrounding the use of personal companies used by so many contractors have shifted the onus onto  client companies engaging contractors to undertake their own assessment if they fall within the relevant parameters in terms of their size, they bear the risk if they get it wrong.

 

So, where have we seen changes in the M&A landscape?

With increased digitalisation the importance of technology for all businesses has grown significantly. So too therefore has its importance in the context of M&A transactions. Buyers typically are much more savvy about technology and nowadays we see much more informed due diligence processes with a focus on validating any underlying technology and the related intellectual property rights, alongside more detailed due diligence on data protection and cyber security risk.

 

Following the implementation of the GDPR, there is also wider recognition of the importance of robust day-to-day compliance through policies and procedures. This has become more evident in recent years with the rise of the number of data breaches being reported. In 2018 the ICO, the UK regulator fined hotel group, Marriott the sum of £18.4 million following its acquisition of Starwood, for what was in fact a Starwood breach that happened prior to the acquisition. Cases such as this provide a clear direction not only for thorough due diligence but for robust procedures and policies to be in place post-acquisition to ensure ongoing compliance.

 

As the UK has retained its position in the forefront of key developments in technology, UK IP rich growth companies have become targets for overseas trade and private equity purchasers for whom the importance of sanctions compliance and ESG policies are a hot topic with buyers unwilling to take on risk on this points whether legal or reputational.

 

Many of these new areas of focus still boil down to a “risk passing” exercise so whilst the issues might be new the conversations between buyer and seller have a familiar ring.  In the current climate there is a great deal of capital to be deployed and buyers’ expectations in terms of the deal timetable and the target’s ability to react to issues during the deal process are higher than ever. To ensure a business looking to embark on a sale process is able to meet those expectations the value in getting ones ducks in a row in advance remains as important a message to impart today as it did ten years ago.

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    “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.”

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    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