TRADE SALE, TMT
NCE Computer Group was founded in 1981 and has established itself as one of the leading names in data center services and solutions across the globe, winning many awards and servicing clients from their offices located in the UK and USA. They currently employee 240 staff divided across both territories.
The founder shareholders had reduced the amount of time that they were spending within the business and where considering various strategies for realising some of their equity value by way of a full or partial sale of the business.
Having been recommended to them by intermediary the shareholders of NCE contacted LDCF to help them explore all of their options. The founder shareholders were keen to reward their existing management team for their efforts over a number of years. Therefore they were very keen to pursue the option of an Management Buy Out. LDCF explained that private equity firms could be used to support the management team and provide the funds necessary to buy out the existing shareholders.
LDCF where then engaged to support the management team throughout the acquisition process and to arrange for them to acquire the appropriate funding. This process involved the creation of an Information Memorandum that was presented to a select number of equity houses that were considered as suitable partners for this business. In these circumstances it was also necessary to produce a very detailed Cashflow model so that the client could present their numbers in a format that was acceptable to the investors. LDCF worked closely with the management team throughout the entire eight months, that it took to complete this transaction.
KEY DEAL CHARACTERISTICS
Management Buy Out to existing management team
Multi jurisdictional transaction, trading over 2 countries and all but 3 US states
Negotiating with financial provider to agree a price
Securing sufficient financial funding to meet the expectations of exiting shareholders
Founder shareholder was able to maintain a position of non-executive director within the company
"IT WAS A REAL PLEASURE TO WORK WITH ANDREW AND CRAIG AT LDCF. THEY REALLY HELPED THE MANAGEMENT TEAM AND I THROUGH THE WHOLE TRANSACTION, FROM FINDING A BRILLIANT PRIVATE EQUITY PARTNER IN ROCKPOOL INVESTMENTS, THROUGH ALL OF THE DUE DILIGENCES UNTIL COMPLETION. THEY WERE ON HAND, DAY OR NIGHT THROUGHOUT THE TRANSACTION AND WITHOUT THEM I DOUBT WE WOULD HAVE COMPLETED. I WOULD RECOMMEND THEM WITHOUT HESITATION AND WILL BE LOOKING FORWARD TO WORKING WITH THEM AGAIN WHEN WE PLAN OUR NEXT TRANSACTION."
Andrew Genever
Group Managing Director, NCE Group Limited