mergers & acquisitions 25
BCMS: multiple deals, multiple deal types
2014 saw Kingsclere-based adviser BCMS experiencing strong deal activity across sectors and borders
In its 25th anniversary year, BCMS has delivered an impressive number of deals across a range of sectors and territories – adding to the 500 plus deals the market- leading adviser has completed in the past decade. July 2014 alone saw BCMS handle 11 completions, the highest number of sale transactions in a single month since 2008. Headquartered near Newbury, BCMS now employs over 240 staff in offices across five continents, and this international reach is a key factor in the company’s ability to locate acquirers for its clients.
So who is buying in 2014, and why? Trade deals, featuring strategic acquirers with complementary business models and clear, strategic motives for purchase continue to be the most prevalent deal type negotiated by BCMS. Recent examples include the £3 million-plus acquisition of Indigo 4 Systems, a specialist software development company, by healthcare software and services provider EMIS Group plc, or the purchase of Poole-based radiation instrumentation specialist Lab Impex Systems for £3.2m by Ultra Electronics plc, which operates in markets including defence, aerospace and energy.
International interest
The value of business synergies applies equally across territories, and the UK is regarded internationally as a stable base for inward investment. BCMS reports strong cross-border activity for 2014, with overseas purchasers actively targeting BCMS’ UK-based clients. Specialist British manufacturers have generated significant interest. This summer, Helmet Integrated Systems – an established provider of protective helmets, communications and respiratory systems, and key supplier to the MoD, USAF and the Joint Strike Fighter programme – was acquired by USA-based Gentex Corporation.
European buyers have been investing in the UK, too. German firm Cultuzz Digital Media’s acquisition of BCMS client Recommended Hotels is an example of the appeal of UK enterprise, and testament to BCMS’ international research capabilities. Cultuzz Digital Media’s Founder and CEO Dr Reinhard Vogel was clear on the key strategic motive for acquisition: “By combining our technological expertise and software development capabilities with Recommended Hotels’ content
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – SEPTEMBER 2014
management capabilities, we will undoubtedly drive future revenue.“
While trade deals predominate, BCMS also reports a changing marketplace: the past 12 months have seen increasing level of management buyout (MBO) funded deals – part of BCMS’ stated commitment to explore all sale options open to their clients. August 2014 saw the company’s largest ever management buyin (MBI) deal, and sales to private investors are also on the rise, with William Ravenna’s acquisition of steel/ PVC manufacturer BMB Weatherproof Canopies a clear example.
’Phenomenal preparation’
There is, of course, a human element to every company sale. What does it feel like to sell a business, and what motivates vendors to take the first step?
Advised by BCMS, Paul and Hillary Cole of Hampshire-based Personal Homefinders sold to Countrywide plc earlier this year. Acquiring the Coles’ established, multi- branch full-service lettings agency and property investment consultancy offered Countrywide strong regional presence in Winchester, Chandlers Ford and Eastleigh.
have had time to do the research and preparation BCMS undertook.
“A little bit more investment got a much better return for us, and the preparation – which we just wouldn’t have been able to do – was phenomenal.“
“BCMS were very enthusiastic about everything they did, and very professional,“ Hillary Cole adds.
One of BCMS’ key differentiators as an M&A adviser is the fact that it typically profiles 150-plus acquirers for each of its clients, aiming to create a genuinely competitive environment.
Unlike many advisers, BCMS never names an asking price – which for two business people with a property background, was clearly a novelty: “One thing we struggled to get our heads around was never putting a price on the business; but it worked.
If left to ourselves, we’d have just
approached the company we wanted to sell to and most likely ended up with 10%- 20% less in value“.
Paul and Hillary Cole of Hampshire’s Personal Homefinders, who sold via BCMS in 2014
To find out more about BCMS or to attend a BCMS business sale seminar, visit the website.
“We always had a sort of woolly exit plan that we would run the business for 10 years and then look to sell,“ says Hillary Cole. “We were constantly badgered by some of the leading brokers in the area asking us to sell,“ adds Paul Cole. “But we knew that if we said yes to them, we probably wouldn’t achieve as good a price as using an adviser who could negotiate a better deal for us.“
The Coles are clear that having a specialist M&A adviser made a difference. As Paul Cole explains, “There are specialist letting agent brokers, but I didn’t feel confident that somebody like that would get the best deal for us. We were flat out running the business, and wouldn’t
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