Mergers and Acquisitions – Scaleup Briefing lowdown

On Thursday 31st January we welcomed 60 colleagues from fast-growth companies and those supporting fast-growth companies, to Engine Shed for our latest Scaleup Briefing event. This series of events was kicked off in October 2017 by Scaleup Enabler Briony Phillips and has covered topics ranging from ‘keeping people happy’ (organisational culture) to ‘raising a million pounds or more’ (access to investment).

The event last week focused on a topic that is little talked about publicly – navigating a business exit and specifically the processes of merger or acquisition. This blog offers a few nuggets of inspiration from our speakers, and a perspective on the event from our host, Briony Phillips (Associate Director and Scaleup Enabler at Engine Shed).

Briony created Scaleup Briefings to bring the community of people that is working in, or working in support of, fast-growth companies together. The content helps attendees to hear first-hand experiences, to learn and to discover new perspectives (or tools) related to the challenges of growing a company.

At this event we heard from Andy Littledale, one of four co-founders of SecondSync, a business that was acquired by Twitter, Jim Shaw who kindly stepped-in to tell the Vouchercloud acquisition story from his perspective as Financial Director as the company was acquired by Groupon and Emily Kent’s story of a failed acquisition of My Action Replay by CricHQ which led to the creation of her new business OneBigCircle. My ten favourite pieces of advice and soundbites from our speakers are captured in the list below:

  1. Have a plan for exit. Use that plan to inform every decision in your business from day one. Anticipate where the industry is moving.
  2. Be clear of your own goals for the exit and make sure the founding team are all on the same page. What are your non-negotiables and your ideal minimum outcome?
  3. Think through the possible intended and unintended consequences of the acquisition/merger. Mitigate for what you can and prepare for everything else. This could be a technical acquisition to increase capability or capacity or it could be a landgrab (with a view to shutting down the opposition), be clear what you’re getting into.
  4. You can’t anticipate the other party’s every move, but you can spend time understanding and interrogating the objectives of the organisation or individual who wants to acquire you/merge with you. Remember that their priorities and position could shift at any time.
  5. Be lucky. Make your own luck. Focus on the outcomes you want. Seek serendipity.
  6. Sometimes acquisition and merger opportunities will find you when you aren’t looking for them. Be ready, have an exit plan in mind, iterate it and respond to the market.
  7. Find professional advice from people that you trust (see below).
  8. Act big. Whether it means working from an office of a bigger brand (a la SecondSync which operated from Aardman’s offices) or having a dataroom set up from day one.
  9. Create your own support network – find experts that can advise you; make time for your mental health. Make sure your founding team has a division of equity that reflects the way you want to work.
  10. Be resilient. If you thought building your business was hard, selling it can be harder and equally as unpredictable (if not more so).
  11. One of the most mentioned tips from our panel discussion was that you should access professional advice to support you in the process. Whether gaining insight into the dataroom you’ll need to compile during due diligence or understanding the strategic approach to finding a buyer, there is a wealth of great specialists on our doorstep. You’ll find details below for those people who were quick enough to respond to my call. It’s always worth asking those who’ve been there and done it before themselves too.

On a related note, I’m wondering whether it’s time for an evolution of the Scale up Briefing – to create a ‘challenges of entrepreneurship’ series in which we explore the worst things that can happen and learn from those that have been there and done it before. Is this something you’d like to see happen? Please let me know your thoughts by completing this super quick (30second // 4 question) survey: https://docs.google.com/forms/d/e/1FAIpQLSc1xPM9rQFEdlQ8nwlE95nWjFcopgz-tAyDeqfhNad3Fj9Okg/viewform

Expert advice that we’ve heard good things about:

Acuity Advisors LLP - Richard Baker, Managing Partner - r.baker@acuity.co.uk

https://www.acuity.co.uk/client-successes/

Acuity are trusted technology advisors with a partner-led approach to every engagement. We focus on mid-market transactions and help clients secure funding for growth and maximise value when selling. Acuity offers a network developed through over 200 monthly buyer conversations and a strong cross-border track record with offices around the world.

Ashfords - Chris Dyson, c.dyson@ashfords.co.uk, 0117 321 8054

www.ashfords.co.uk/business-legal-services/corporate/mergers-acquisitions

Ashfords is a national provider of legal, professional and regulatory services. We combine legal expertise, commercial experience and our wider network to help our clients achieve their M&A goals, providing value for time and value for money.

TLT Solicitors - Jon Gill, Partner, jon.gill@tltsolicitors.com 03330060793 | Nina Searle, Associate, nina.searle@tltsolicitors.com 03330061804

https://www.tltsolicitors.com/services/corporate/mergers-and-acquisitions/

TLT's award winning corporate team operate as one team across their Bristol, London, Belfast, Glasgow and Manchester offices. With 13 partners and a team of over 30 lawyers in total, we are a leading adviser in the UK mid-market, and our Bristol team is one of the largest and best regarded in the South West (Corporate Law Firm of the Year at South West Dealmakers 2018). Our team of corporate experts has substantial experience advising on mergers and acquisitions (M&A) with a complex or cross-border dynamic, for example the sale of SecondSync to Twitter, and the sale of Stirling Dynamics to Assystem Technologies (which was South West Deal of the Year for 2018). The team also has a distinct focus on supporting Fast Growth businesses and their investors throughout their journey together.

VWV - Nathan Guest, Corporate Partner & Head of Technology; nguest@vwv.co.uk; 07795 271 513

https://www.vwv.co.uk/law-sector/technology-law/mergers-acquisitions-disposals-buy-outs and https://www.vwv.co.uk/law-sector/technology-law

Our 8 partner, 27 lawyer, Corporate team uses its expertise across multiple sectors (including technology, healthcare, education and pharmaceutical & life sciences) to support entrepreneurs and management teams on exits, acquisitions and buy outs. A key focus for us is "exit readiness" - helping clients to prepare the business for sale by carrying out focused legal due diligence, typically months in advance of going to market. This gives us and management the opportunity to rectify identified issues that might otherwise threaten the valuation or, worse, the deal. This approach also takes weeks out of a typical M&A process, enabling management to concentrate on the business at a time when its performance will never be more in the spotlight.

And a handful of others that were mentioned at the event:

SETsquared Bristol and specifically their team of 'Entrepreneurs in Residence' - https://setsquared-bristol.co.uk/ is the global #1 University Business Incubator, it provides a dynamic, modern, and supportive environment to grow your technology business.

Laura Shaw @ BDO: https://www.bdo.co.uk/en-gb/our-people/laura-shaw

Rebecca Steer at Steer and Co. https://www.steerandco.com/

Jim Shaw @Shaw and Co. https://www.shawllp.co.uk/