Springboard advised on 21 deals in 2019 with 12 sales and 9 acquisitions. Notable transactions included the sale of international clinical trials provider Medinova to Nasdaq quoted ICON whilst Swedish acquirers featured on two other high profile sales – Redspeed International and Natgraph. Closer to home the firm advised the shareholders of Parking Facilities, Southall Associates and Thomas Fudge’s on their strategic sales to UK trade acquirors.

Springboard continued its support of acquisitive buy and build platforms; supporting Sykes Holiday Cottages on five acquisitions and Sovereign Capital backed Bristow and Sutor on its purchase of Credit Style.

Springboard Partner Simon Ward said

“We are delighted that 2020 has already seen us complete two deals in January. This builds on the great momentum built over 2019 when we were privileged to work with some fantastic clients. Our ability to access strategic acquirors both overseas and in the UK was a particular feature whilst around half of our deals involved private equity. Our pipeline of opportunities remains strong and we look forward to the 2020 with real optimism.”

With the Tory party securing a very substantial 80 seat majority in Parliament, with their “Get Brexit Done” slogan clearly resonating with the electorate, what will happen in 2020 and beyond?

Simon Ward, Partner with Springboard CF, looks into his crystal ball and makes some predictions of his own, together with measured thoughts on the outlook for the UK economy in general and more specifically the private equity market.

The election result has provided much needed clarity over Brexit and removed the nervousness over the likely impact of a potential Jeremy Corbyn Government on the British economy for business.

There is no doubt that we enter 2020 with renewed confidence and immense relief that there is now a clear way forward for the UK, but the question is whether this ‘feel-good’ factor (Boris bounce?) will significantly boost M & A activity? For some years now the private equity market’s coffers have continued to swell and, whilst there has been a resulting level of steady activity, there is potential to see much more! It is my gut feeling that we will see a renewed vigour to deal making over the next 18 months. Certainly, Springboard has a strong pipeline of potential transactions.

Looking at the outlook for individual sectors the picture is more nuanced. In terms of a consumer bounce, we will perhaps have to wait and see. Retail sales figures over the Christmas period were disappointing, but perhaps the best bellwether of a potential consumer confidence bounce will be how the housing market responds.

There should be real opportunities for those companies that benefit from public sector or infrastructure drivers, with the winds of change looking set fair as the Government looks to support and provide a real financial catalyst to the regional economies across the UK.

The UK remains an attractive proposition to overseas investors and we should see increased levels of investment over the next few years particularly from the United States and Asia.

Not everything is rosy and we should be mindful of two potential brakes on M & A activity – that of actually getting ‘Brexit done’ with a good deal for the UK (negotiations may be even tougher than anticipated) although trying to second guess the impact of this like the last three years twists and turns doesn’t feel productive…

What should be of more concern to the business founder is the unresolved issue of the future of ‘entrepreneurs’ relief. We know that Sir Edward Troup, former executive chair of HMRC, called on both the Conservative and Labour parties to abolish ‘entrepreneurs relief’ and that an elected Labour Government would have done so. In their manifesto, the Conservatives promised a review and we must now wait and see. It is to be hoped that changes are relatively small, but we may in the very short term see an acceleration of activity as founders look to take advantage of entrepreneurs relief while it lasts. In the round, however, to remove a relief that encourages wealth and job creation would be deeply disappointing.

So overall, we enter a new decade with far more clarity than has been around for many years. The UK outlook is certainly more positive than many global economies. Challenges remain but for the owner, manager or private equity investor operating in the UK there is much to be optimistic about.

Springboard New Recruits

Award-winning corporate finance adviser Springboard Corporate Finance is delighted to announce the recruitment of three new members to its team.

Sumeet Dhillon joins as an Executive from PwC Aberdeen where he worked in the transaction services and Assurance departments and specialised in the oil and gas market. Sumeet graduated from Newcastle University with a degree in Business, Accounting & Finance which was a flying start course in collaboration with ICAEW and rolling placements with PwC.

Siobhan Lloyd has joined from Gateley Legal as Business Development Manager to work with the team on business development and direct origination. Siobhan started her career in retail banking and qualified as a stockbroker before joining EY as a trainee tax consultant. She then went on to be a tax consultant for MHA MacIntyre Hudson and gained a wealth of business development experience from working at Haines Watts.

Dhiren Patel joins as an Analyst to provide company and sector valuations across a number of sectors, bespoke research to support deal delivery and to assist in the production of pitch presentations. Dhiren graduated from the University of Liverpool with a first-class degree in Economics in 2018 and, prior to joining Springboard he worked as a Finance Graduate at TIMET UK.

Springboard Partner Simon Ward commented “2019 was a year of exceptionally strong activity for us at Springboard – completing a record number of deals across the buy and sell side. The recruitment of Sumeet, Siobhan and Dhiren is a demonstration of our continued optimism about 2020 and our commitment to providing great client service across our business. We are delighted to welcome them to the team.”

 

Photo of the team with their Bags for Brummies donation

This year we are supporting the ‘Bags for Brummies’ initiative from local charity LoveBrum.

As the winter nights set in and Birmingham prepares for the festive season, the homeless community is struggling to stay warm. LoveBrum asks local businesses and individuals to help provide them with a bag of essential items to help make the colder months a little easier.

The firm and the Springboard team donated a selection of toiletries, sweet treats, warm clothing and sleeping bags to the appeal. LoveBrum will pack them into bags which will be handed out to those in need at SIFA Fireside‘s Annual Christmas lunch.

To find out more about Bags for Brummies and how you and your team can get involved next year, click here.

On behalf of everyone at Springboard, we would like to wish you a Merry Christmas and a peaceful and prosperous 2020.

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For an owner manager, selling your business can be a stressful and time consuming process and it can be easy for your attention to wander from day to day business operations. However, retaining a relentless focus on your business and its performance is absolutely critical when undertaking a transaction. Business performance typically comes under even greater scrutiny during a sales process and, for even the most strategic of acquirers, the profitability and performance of their prospective acquisition is key.

Justin Sparks, Partner at Springboard Corporate Finance, looks at how owner managers can keep their results on target whilst minimising the inevitable distraction of  a sale process.

Keeping on track is all about planning and preparation. Most management teams will nominate point men to deal with a process, allowing their colleagues to stick to the day job and be briefed towards the end of the process. In smaller businesses, where this is less practical, introducing an experienced finance director as a consultant to lead preparations and work with advisors from the business side to manage a deal can work well and reduce that day to day burden.

We typically advise our clients to keep the circle of trust tight and try to avoid the inevitable uncertainty that a process brings.  Incentivising key members of the team is important (and will typically be a focus of an acquirer).  This, again, is a matter of planning and, here at Springboard, we see our role as guiding a business owner through these difficult practical decisions as early as possible in the preparation phase.

Inevitably, the announcement of a sale has the potential to affect team confidence and morale, which can in turn impact the performance of the business.  It is imperative that messages delivered by the owner manager and acquirer to the wider management team and staff are positive and deal with the opportunities that a sale will bring to all stakeholders.  A good owner manager will have made their decision on the right home for their business based on a number of factors and it becomes a matter of effectively communicating those reasons to each group.

In short, a sale process is stressful and challenging.  With the right planning and tactical thought from an early stage, the risks can be managed and the focus on the end goal of delivering the right deal at the best price to the right acquirer can be achieved.

Runners in the Birmingham Half Marathon

On Sunday 13th October, Springboard Partner David Neate will be running the Simply Health Great Birmingham Run in support of Talent Match Staffordshire.

Unfortunately, many young people in Staffordshire have fallen between the cracks of social care and are struggling to cope with the effects of loneliness, trauma or mental health problems. Getting into any meaningful work is only a distant dream for them.

This is where Talent Match Staffordshire (TMS) steps up. TMS is a charity that provides one-to-one support to young people to give them the confidence, skills and experience they need to move on with their lives and into employment.

TMS recognises that different people will need different levels of support to gain employment. The programme has a particular focus on helping young people who have been long-term unemployed and face significant barriers to employment, such as parenting or caring responsibilities, disability or a lack of education, to find career opportunities.

TMS provides tailored support to young people according to their needs and aspirations, which can include wellbeing and mental health support, as well as practical help.

David would be very grateful if you would consider sponsoring him and supporting this very worthy cause.  Click here to donate.

Despite the ongoing uncertainty surrounding Brexit over the past three years UK businesses remain attractive to overseas investors. According to Ben Bolt, partner with Springboard CF, the fundamentals of our economy are good and the current weakness of sterling provides a further stimulus to foreign investment.

Since May Springboard have advised on seven transactions including two cross-border sales to Swedish companies and one to a Nasdaq-listed company. With the pound trading at almost a two-year low against the euro and dollar, UK companies are increasingly becoming an appealing proposition to European and US investors.

Following the vote to leave the EU in June 2016, the underlying uncertainty surrounding Brexit has arguably been factored into the stock markets, as well as the value of sterling. The economy has held up well despite the doom-mongers predicting it would ‘fall over a cliff.’

Whilst some UK companies may have postponed investment decisions during this period, foreign investors are looking beyond the current uncertainty that has accompanied the unresolved Brexit negotiations. Among the key targets for them are our thriving tech and pharma sectors which contain many innovative young British businesses. Some of these are looking for additional funding to take them to the next stage of development, others become take-over targets.

There is clear evidence that Asia and the US are increasingly focusing on the opportunities here, with Japan and Singapore being particularly drawn to opportunities in the fintech and financial arenas.

Figures recently released by the Department of Digital, Culture, Media and Sport revealed that UK tech companies attracted foreign investment to the tune of £5.5 billion in the first seven months of this year, with US and Asian firms leading the way.

The UK continues to attract the attention of overseas investment funds which are looking to take advantage of the growth potential here. Whilst the Brexit deadline of October 31 is looming large on the horizon it is clear that our international neighbours will continue to adopt a long term view and look to do business with us – even if there is some economic turbulence along the way!

Springboard Partners

Springboard Corporate Finance has seen a record start to its financial year with seven deal completions since 1st May.

Award-winning Springboard has advised on four sales and three acquisitions with notable deals including the sales of:

  • Coventry-based clinical research operation Medinova to Nasdaq-listed ICON plc
  • Nottingham-based manufacturer Natgraph to Indutrade AB of Sweden
  • dg8 design and engineering, a Derby based transport consultancy to Icomera, the world’s leading provider of wireless internet connectivity for public transport.

Springboard has also advised the partners of Vine Property Management on the £40m merger with Fisher German, while the firm has also provided debt advisory services to long- standing client, building products manufacturer JB Kind.

Springboard partner Simon Ward commented: “We are delighted with the recent completions, demonstrating continuing buoyancy in the mid-market. Delivering strategic sales to overseas and UK acquirors remains a key focus and this has been a real feature over recent months. We have been privileged to work with some great clients and to identify buyers for and then execute some fantastic deals. Springboard remains as committed as ever to providing advice on both the buy and sell side of deals and we are pleased to have helped JB Kind as well as a number of our longstanding private equity clients. Our pipeline is strong and we remain positive on the outlook for the market.”

Images of office windows

Historically so-called private equity buy and build platforms were something of a novelty. A number of investors attempted to differentiate themselves by pioneering growth by acquisition, but they were the exception.  My, how times have changed…

It is now rare that we advise on a sale mandate that doesn’t include a significant number of private equity backed businesses, often within the strategic buyer’s group. Private equity portfolio companies have become the most prolific of corporate acquirers. Using the focussed language of acquisitions and with a relentless drive to deliver value via synergies, this shouldn’t perhaps be too much of a surprise. It’s worth bearing in mind that PE investors had dry powder (uninvested funds) of more than $2tn at the end of 2018.

Whilst the pricing of primary investments has continued to rise, so has the appetite for funds to follow their money, support management teams and strategies they are already comfortable with has followed suit.

So, for the business owner or corporate looking to divest what does this mean?

Unsurprisingly it is good news on several counts – the most obvious being that more interest and more buyers will drive up value, as, significantly, the PE backed buyer is likely to be a savvy, experienced and committed player. There will be little emotion and a willingness to participate in and deliver a process that will serve, in most cases, to reduce transaction risk. Finally, for PE backed buyers there is often a willingness to be creative around deal structures, perhaps around ongoing participation and reward for future growth not seen from other buyers.

At Springboard we have developed an expertise that sits at the heart of this market. We work with a number of PE funds in supporting their portfolio companies from identifying and originating acquisitions through to negotiation, arranging of funding and execution. Equally we have completed a number of sales (at strategic values) on behalf of founders to PE backed acquirers.