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PLUS LISTING
has provided us with accreditation the private equity or VC route, they would
over our working capital – that gives have had to live under a more hands-on
people confidence. And from a material arrangement from the investor.”
point of view, we can offer share schemes
to our staff.” PRIVATE EQUITY
Ivy says that early last year dotMailer
PLUS POINTS found itself at a crossroads; the business
West End Ventures, a PLUS-listed cash was growing rapidly and gaining profile
shell that floated in September 2007 raising with new clients. And its strong growth
£650,000 to acquire media businesses, began trajectory, which earned it a place in
negotiations with the Croydon enterprise in Deloitte’s Technology Fast 500 EMEA
June last year. On completion of the deal, 2008 for 372 per cent growth in five years,
the shell company issued one billion shares, also grabbed the attention of private
giving the digital marketing agency 76.8 per equity investors.
cent of the new company. “In the early part of 2008, we had
Steered by founding director and City PR numerous approaches from private equity
man Nicholas Nelson, West End Ventures funds who were interested in discussing
has a market capitalisation of £2.9 million options to take the business forward,”
and £741,000 on its balance sheet. Unlike Simmonds recalls.
AIM cash shells, which have to raise a “We rejected these investors because
minimum of £3 million and convene private equity would have driven us
shareholders every 12 months until a deal is down a very narrow track. The fund
closed, “the template is less formalised on managers we spoke to were keen
PLUS”, says the tertiary exchange.
“We had numerous approaches
for us to focus exclusively on email
Shortly after its flotation, West End marketing and dominate the SME space,
Ventures began talks with an established from private equity who were with a view to expanding into Europe.
television and film post-production
interested in discussing
But we are a business with a wider
venture, with plans to close what looked range of competencies. The potential
like a straightforward deal in November. options to take the investors were also looking to exit earlier
However, after a lengthy due diligence
business forward”
than dotMailer would have liked.
process, the PLUS shell company dotMailer opted for West End Ventures
withdrew from negotiations. Peter Simmonds because of its collaborative approach
“We were after a business with a track to the transaction, which included
record of profitability, a robust balance a fixed price package for advisory services
sheet and ambitious ideas,” says Nelson, of belief and trust in us to move forward from law firm Pritchard Englefield,
“and these are few and far between, with the flotation without interrupting accountancy firms Jefferies Henry and
especially in a fast-growing sector such their day-to-day work.” Shipleys, and corporate adviser Alfred
as the media industry. As part of the deal, Nelson and Pacy, Henry. This was preferable to the more
“One of our investors and directors, founder of MetroVideo – which was “confrontational approach” taken by
David Pacy, knew dotMailer and believed acquired in 1986 by WPP, the world’s private equity.
that this was the type of business that we second-largest advertising and marketing “Securing the deal with West End
were looking for. I think the hand-holding group – will join the board as non- Ventures will allow us to continue with the
aspect of the deal appealed to dotMailer’s executive directors. growth strategy that we feel is right for us
shareholders. A flotation can be an “If they want our assistance, we are and gives us the opportunity to create a
arduous process, especially if you are new willing to help. But nothing will be forced group of digital marketing companies,”
to the game. We instilled in them a sense upon them,” says Nelson. “Had they pursued concludes Simmonds. ■
24 Mergers & Acquisitions
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