mergers & acquisitions
Moore Blatch completes £250 million of corporate tech deals in July and August
Southampton law firm Moore Blatch has advised on £250m of technology company sales in the past two months. In July it completed the £57m sale of software and cloud computing specialist Trustmarque Solutions to outsourcer Capita. In August it completed the £43m sale of one of the UK’s largest outsourcing companies Liberata, to Japanese listed outsourcer, Outsourcing Inc. as well as two further deals worth an additional £150m. In this article Peter Jeffery, who led the deals, talks about what was involved, some of the other deals he has been working on and the importance of understanding the industry in which the company operates when advising on corporate transactions
As a partner in the firm’s corporate team I specialise in corporate finance, mergers and acquisitions, joint ventures, management buy outs/ins, share option schemes and banking transactions.
Over recent years one of the growth areas for Moore Blatch has been transactions involving technology companies; from telecommunications and outsourcing to specialist systems that support the chemicals industry or health and humanitarian efforts in Africa. While the legal principles are the same regardless of business sector, the unprecedented change within the technology sector does create challenges.
Technology embraces a huge diversity of organisations, but its deployment also creates other issues which as a firm we address, such as employment issues relating to social media usage, legal issues relating to data protection, and immigration issues as many tech businesses rely on international labour.
The starting point for any transaction is a solid understanding of our client’s business and the industry in which it operates. The best way to illustrate this is by looking at a recent example.
In August we advised management on our second major technology company sale in as many months. The £43m sale was for one of the UK’s largest outsourcing companies Liberata, which employs nearly 1,500 staff, to Japanese listed outsourcer, Outsourcing Inc.
The sale comes just eight weeks after we advised on the £57m sale of Liberata subsidiary Trustmarque, which employs 620 people, to Capita. It’s worth noting that this deal took just seven days to complete.
Legally, transactions involving outsourcing organisations and diverse technology companies are by their nature very complex. While a sale may be for a single entity, the operating divisions are often
THE BUSINESS MAGAZINE – SOLENT & SOUTH COAST – SEPTEMBER 2016
unique businesses in their own right. This issue is further complicated when the purchaser is located or, in Outsourcing Inc’s case, listed overseas. This transaction was completed in just five weeks.
While the headline sales are often what attracts attention, perhaps of greater importance, and an often overlooked part of any transaction that can fundamentally impact on the price and ease of sale, is how best to structure or restructure a business for sale.
Restructuring can involve the removal of dormant companies and simplification of a complex group structure and selling a subsidiary. The eventual value for the owner is thus significantly higher than if the business was sold as a ‘job lot’.
What other deals have you worked on?
In the past two years I have completed over 30 deals. Not all of the deals are large and they come in many different shapes and sizes. For example, we supported the management buyout of Vikoma International, an Isle of Wight based company which is a world leader in technology-led solutions for the chemicals market and technology to clean up oil and chemical spills.
At the other end of the spectrum was the legal support for venture capital investment to BluPoint, a University of Southampton spinout. The company delivers offline and off-grid wireless based technology to remote parts of the world supporting education, healthcare and humanitarian efforts. In terms of value the deal may only be a few hundreds of thousands, but in terms of advice it differs little from transactions 10 times the value and in terms of importance the value is immeasurable.
While technology-related transactions are growing, they only form part of what we do and traditional business sectors remain very important.
These are only some of the highlights and we expect to have many more transactions in the technology sector. Our team of over 20 specialist lawyers support the whole range of corporate actions from acquisitions and sales through to restructures, refinancing, capital raising and securing new banking facilities.
Peter Jeffery
peter.jeffery@
mooreblatch.com 023 8071 8040
businessmag.co.uk
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