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AN INTRODUCTION TO JDC’s PRIVATE EQUITY SERVICES
An introduction to JDC’s Private Equity services
JDC was formed in 2004 to provide something different; highly specialist but highly personal corporate finance, advisory and tax services for businesses across our region.
With a team of highly experienced professionals across a mix of disciplines and with an unrivalled depth of knowledge, we provide the senior led service that our clients demand.
Private Equity backing can provide a fantastic opportunity for the right business and its owners, but as a specialist area of advisory work, your Private Equity adviser really does need to be able to demonstrate their credentials.
This introduction serves to demonstrate the depth of JDC’s experience and showcases success in a raft of recent Private Equity transactions. I hope it will be of interest to you.
A few words from our Corporate Finance Director
I joined JDC in early 2014 to lead our corporate finance services. Prior to that I worked for one of the largest accountancy firms in the UK specialising in sale and purchase transactions, MBOs, refinancing and advising on Private Equity transactions. I have acted as a lead adviser on a significant number of transactions predominately in East Anglia across a range of sectors with transactions size from £3m to £100m+.
Private Equity is often seen in a bad light by many business owners, but in my experience for the right business, team and growth story, Private Equity can be a very attractive proposition. Who would not be attracted with the choice of de-risking a large proportion of today’s value, ring-fencing the rest, whilst also obtaining funding to accelerate future growth and benefiting from this growth with a retained equity stake. It also gives the opportunity to realign the overall equity split within the management team.
Our job is to give honest experienced advice to the company and management team of deliverable deal structures, whether Private Equity is the right option for them culturally and financially, what it really means to go through a Private Equity process and any implications for running the business going forward.
JON DODGE FCA CF - FOUNDER DAVE HOWES FCA MBA CF - DIRECTOR
WHAT AREPRIVATEEQUITY
SERVICES?Private Equity services are designed to assist businesses which are seeking equity investment for either development capital to support their business plans, acquisition capital or a management buyout including de-risking shareholders.
Our delivery of these services will be bespoke to the individuals and business requirements but will always contain clear and concise expert advice.
The JDC team has a wealth of experience in Private Equity transactions and has established relationships with Private Equity houses, which enable us to present the best fit investors for you and your business.
Through our corporate finance expertise, we will lead the transaction from day one to completion and we will be available to the shareholders and management team throughout the process to provide essential support and advice.
Our integrated tax expertise complements our Private Equity services to ensure that whatever deal is structured it not only works commercially but also ensures the most tax efficient structure.
Post completion of a transaction, we continue to provide support services as required.
Specialist services available:
• Pre-marketing review of all areas of the business.• Information memorandum preparation.• Creation of business plan and integrated
financial model with sensitivity analysis.• Internal rate of return (IRR) modelling.• Tax review and planning of shareholders and
company’s tax position to best structure a deal.• Investor profiling and research to identify best
fits with the company and management team.• Assistance with creating and delivering investor
presentations.• Negotiate heads of terms, sale and purchase
agreement, investment agreement and otherkey legal documents.
• Project manage due diligence process.• Creation of 100 day post deal plan and support
in delivering the plan.
Private Equity investors provide finance in return for an equity stake supported by loan notes within a company. They are generally medium to long term investors, typically investing in companies for between three to ten years, which means a commitment to build a lasting and sustainable value within the business.
Private Equity companies raise their investment funds from institutional investors such as pension funds and high net worth individuals. To generate returns for their investors, the Private Equity house looks to create value through supporting high quality management teams and a credible business growth plan, then realising their investment through a strategic trade sale, second round of Private Equity funding or public listing.
TYPES OF PRIVATE EQUITY
VCT Private Equity Business Growth Fund
• Highly tax efficient fund looking to provide PrivateEquity capital to fast growth earlier stage businesses.
• Investors get tax breaks from investment as benefit fortaking more risk on earlier stage companies.
• Looking to invest development capital in businesseswhose first commercial sale was under seven years ago(10 years if a proven knowledge/IP led business).
• Maximum investment £12m over company lifetime(£15m for knowledge led business).
• Certain rules on what types of companies the fundscan invest in to ensure they are ‘qualifying’.
• No specific time period for exit.
• VCTs cannot take control of the company and therefore typically the investment is a minority equity investment.
• Little financial covenants and swamping rights toprotect VCT tax status.
• Funds cannot be used to fund MBOs, cash out oracquisitions of existing business.
• Not sector specific.
• Apart from evergreen funds which are not so pressedon an exit time frame, a PE house is typically looking foran exit in three to five years.
• Looking for a money multiple return of 2.5x to 3x theinitial investment on exit delivering an IRR of c.30%.
• Lower mid-market looking at deals £1m to £10m.
• Mid-market Private Equity firms looking at deals valuedat £10m to £100m.
• Large buyout market Private Equity firms looking atdeals valued £100m+.
• Larger deals tend to look at majority equity investmentswhereas the smaller mid-market to lower mid-marketlook to minority investments.
• MBOs, MBIs, cash out all allowed including deals withno development capital.
• More controls/consent matters than VCTs.
• Financial covenants/swamping rights if breaches ofagreements.
• Will get sector specific Private Equity houses, especiallyin the larger deals.
• Often at the higher end will set up acquisition vehiclesif looking to go on a buy and build strategy.
• Funded by the main high street banks at the directionof the government during the last recession.
• Provides initial investments from £2m to £10m for aminority stake in businesses.
• A proportion of the investment must be for growthcapital.
• Funding for up to 10 years.
• Less restrictions/consent matters/covenants in equitydocuments.
• More relaxed approach with less involvement in thebusiness.
• Funding can be cheaper than Private Equity houses.
• Invests in all sectors.
“Dave has become a key and most trusted adviser to the management team at Oxifree. JDC provided quality advice and service throughout the complex process, helping to find an excellent partner in Octopus and also run an exceptional process to deliver a double digit valuation multiple to the stakeholders. Their hard work and commitment was instrumental in supporting us and we could not have secured the deal without them. It was a pleasure to work with the team and I would be happy to recommend them to anyone considering a transaction.”
Ed Hall, CEO of Oxifree Global Limited.
Private Equity can support a management team in an MBO transaction by providing the capital required to buy out all or part of a shareholding, whilst enabling equity to pass to the management team.
Existing shareholders can partially realise the current value of their shareholding and ‘roll-over’ the remaining value to participate in a future exit and upside.
Private Equity can provide funding to enable founding shareholders to exit.
A business may not be able to raise sufficient funds to achieve its plan through traditional methods. Private Equity provides an alternative opportunity to raising the required funding.
Provide a financial structure to assist the company to accelerate its growth plan organically or via acquisitions under a buy and build strategy.
Provide development capital to enable the company to take advantage of market opportunities such as investment in technology, introducing products to a market or increasing company capacity.
ManagementBuy-out
AcceleratedGrowth
ShareholderDe-risking
MarketOpportunities
Funding Gap
FoundingShareholder
Exit
WHY CONSIDER PRIVATE EQUITY?
WHAT ARE PRIVATE EQUITY LOOKING FOR?Business
• Led by a high quality management team.
• Established business plan.
• Growth strategy - organic or buy and build.
• Growth opportunities in the business sector.
• Niche or defendable market positions.
• Barriers to entry.
• Intellectual property.
• Cash generative.
Exit
Private Equity typically look for an exit between three and five years, however, Evergreen and BGF funds can be up to 10 years.
Ultimately the management will decide when the moment is right for an exit and there is no minimum period the Private Equity houses are required to hold their investments.
On an exit Private Equity require a clean exit with no warranties given by the Private Equity house.
Types of exit:
• Strategic trade sale• Secondary Private Equity funding• Stock exchange listing
Returns
Private Equity typically aim to get a return of 30%+ internal rate of return and 2.5x to 3x money multiple return on their initial investment.
Costs
• Loan note interest (paid versus rolled up interest)• Annual monitoring fee• Arrangement fee (percentage of equity cheque)• Chairman fees• Due diligence and legal fees
Raising the bar
“We engaged JDC due to their successful track record in our sector and the immediate confidence we felt in their ability to secure a deal with the right structure for all parties within our Shareholder Group.
Dave Howes and his team guided us through every step of the transaction, providing advice and importantly acting as an effective filter during the due diligence process, allowing us to continue running our business in parallel.
Their commitment to the transaction, negotiating the best deal and securing the right partner in Maven was always evident and went beyond what we would have expected from our corporate finance advisers.
We made a good decision to appoint JDC and I would have no hesitation in recommending them to any business owner considering a transaction.”
David Fletcher, CEO of GEV Group
“As our key adviser from day one, Jon has provided an irreplaceable source of advice, support and experience in all of our transactions and virtually every other area of our business development. The additional support available from the team at JDC has also been spot on. It is great to have experienced advisers who we trust implicitly and who are genuinely committed to us and our business.”
Graham Hacon, Founder of 3sun Group Limited
CONSIDERATIONS FOR THE COMPANY
Funding requirements
• Development capital introduced to provideheadroom within the company and ability todeliver growth strategy.
• Private Equity have the ability to remove anybank financing, therefore, less onerous covenantswith reduced reporting to the bank.
Ongoing cost:
• Non rolled up loan note interest• Private Equity house monitoring fee• Chairman fee
Corporate
• Appointment of chairman.
• Typically at least 10 board meetings required peryear.
• Monthly management reporting to Private Equityhouse.
• Appointment of Investment Director and boardobservers.
• Raise profile and credibility of the company byhaving Private Equity investment.
• Improved internal systems and procedures.
• Increase scrutiny of results and projections.
Trading
Typical consent matters, which would require approval from the Private Equity house before actioning:
• Make material change to nature of the business• Capital expenditure over a set value• Entering into contracts over a set value, onerous
or not at arm’s length• Acquiring or disposing of businesses• Enter into partnership or joint venture• Appointing senior or high paid staff• Appointment of Statutory Directors• Changes to share capital• Appointment of auditors• Make any change of bank or terms of any
mandate given to any banks• Borrow or lend any monies
Raising the bar
CONSIDERATIONS FOR FOUNDING SHAREHOLDERSFull exit
• Large element of cash received on day one.
• Maximum valuation? Would a strategic trade sale achieve a greater value?
• Reduce risk - realise value on day one.
• Restrictive covenants for exiting shareholders.
• Aim to maximise day one cash through maximum valuation of the company.
• Sacrifice share of any of the future upside - or retain higher equity stake?
• Is there enough upside left for management team for future growth?
Partial exit
• Dilution of shareholding and loss of control.
• Founder shareholders’ rights for good/bad leaver.
• De-risk through day one cash out and ring-fenced value.
• Share of future upside through rolled over equity.
• Less cash out on day one due to element of value to be ‘rolled over’ goingforward.
• Breakdown of rolled over value between loan notes and equity.
• Can founder shareholder live with Private Equity structure?
• Future value in the hands of the management team.
Raising the bar
“We would not have closed this deal without JDC’s advice, support and deal management skills. From day one to the close of the transaction they were excellent. The whole management team (and our investors) are looking forward to continuing our long and successful relationship as we continue to grow our business. Thank you JDC!”
George Morrison, Managing Director of Aquaterra Energy
“I found the advice and input from JDC to be invaluable, providing clear direction on what was required, working alongside the team to ensure all the deliverables were met. I am under no doubt that without the support of Dave and Adam in leading and managing the transaction, alongside James in the creation of the detailed financial models, that we would not have concluded the process within the agreed timeframe.
We would strongly recommend JDC to companies who are looking to unlock growth and achieve their full potential and look forward to continuing to work with JDC as our trusted advisers in the future.”
Gareth Miller, Director of Cornwall Insight
CONSIDERATIONS FOR CONTINUING
MANAGEMENTFinancial
• Availability of other finance that has a lower cost.
• Management’s confidence and belief in achieving the business plans.
• Enough left in to incentivise management team?
• Private Equity transaction fees to be funded by Newco. Fee typically greaterthan £0.75 million.
• Less cash out than existing shareholders due to the Private Equity house wantingmanagement to be incentivised to grow the value of the business.
• Can debt be raised alongside equity at cheaper rates?
• Where is the future exit going to come from?
Cultural/Management
• Distribution of Sweet Equity to new and existing members of the managementteam.
• Composition of new board and voting rights.
• Appointment and relationship with Investment Director and Chairman.
• Strength of second tier management.
• Appreciation of Private Equity restrictions: good/bad leaver covenants; swamping rights; drag rights.
• Key consent matters.
• New service agreements to be issued.
Raising the bar
FREQUENTLY ASKED QUESTIONS
Here are some examples of typical questions we are asked by shareholders/management teams going through a Private Equity process:
What are good leavers, founder leavers and bad leavers?
The investment agreement signed with the PE house will include definitions of how a member of the management team’s shares will be dealt with if they were to leave early before the PE house exits.
A good leaver is usually defined as someone who leaves due to death, disability, ill health, redundancy or if the board decides to class them as a good leaver. In this case the leaver would receive the market value for his/her shares.
A bad leaver is usually defined as someone who voluntarily resigns or leaves under any other circumstance not defined as a good leaver. In this case the leaver would typically receive the lower of the market price of the shares and the issue price of the shares.
We normally negotiate a founder leaver clause for transactions where the company has a large shareholder who rolls value into the Private Equity structure and retains a significant equity stake going forward. The founder would typically receive market value for their shares in all circumstances except fraud or dishonesty.
What format should the business plan take and how deep should the drill down be?
In our opinion, a business plan has to include enough detail for the PE house to obtain comfort in respect of the business and to use the detail for their Investment Committee without having to come back to the management team for a lot more information. This is the key document that is then used for commercial due diligence, financial diligence, etc so it really has to stand up to scrutiny.
That is why JDC spend so much time at the start of a PE process doing our own diligence whilst preparing the business plan - so we know it will stand up to scrutiny. We would also expect to have a detailed financial model alongside the business plan that has been sensitised and has all the assumptions laid out to aid financial diligence.
What are swamping rights?
In essence, these are enhanced voting rights contained in the articles of association, which enable the PE house to assume control of the Newco board by obtaining a voting majority in certain circumstances such as where the business is under-performing, where there is an event or default under any banking facilities or in order to enforce a sale of Newco to a third party.
How much commercial/sensitive information should we expect to provide?
Sharing sensitive information with a PE house is of significantly less risk than trade, as unless they already have a competitor or similar business as a portfolio company, giving them the sensitive information should not commercially risk the business. The PE house may have great experience of building fast growing businesses but is unlikely to have specific knowledge of the business’ direct industry and therefore the plan needs to be detailed enough to give them comfort on the market and the dynamics. They would be backing management’s expertise in the particular industry.
If trade was the preferred option (or the approach was to test a couple of trade parties alongside PE) we would typically hold back sensitive information from the information memorandum/business plan until a lot later in the process to protect the business. A trade buyer is likely to have very good knowledge of the industry already and does not need the level of detail required by PE to analyse the opportunity.
What form of warranties would we have to provide against the business plan?
Typically we negotiate that the management team only warrants the factual accuracy of the business plan and that the assumptions were reasonable at the time the plan was prepared. We would never allow the management team to warrant that the business plan will be delivered as none of us can predict the future.
What is Sweet Equity?
Going forward under the new structure, the PE house will want to ensure the right members of the management team are incentivised to deliver growth and will often set aside an additional pot of equity known as ‘Sweet Equity’ which can consist of ‘free’ shares issued to the management team at par value (as opposed to market value) which are allocated amongst the management team, where appropriate. This can be to the existing team on completion or as and when new management join or become key to the business.
For the commercial due diligence, what typically is the interrogation that can be expected?
A lot of this work is done independently by the commercial due diligence providers and again we liaise with them to take the pressure off the team, answer their questions and only go to the management team when necessary. We always suggest that the team present to the CDD team at the beginning of the process to get them up to speed with the business and get them onside with the business plan.
One of the key parts of CDD is customer referencing and the management team will need to provide details of customers that can be contacted towards the end of the process.
In our opinion, this is the one piece of due diligence that would be very useful for the business, whatever happens, as it gives a lot of insight into the market and its customer base.
For the collation of the data room and financial due diligence, what typically is the interrogation that can be expected? Will the finance department be a key part of this?
JDC does its own due diligence upfront to try and save time when it comes to external due diligence. This is one of our points of difference against other advisers.
Once we get into external due diligence, JDC request that the financial due diligence providers base themselves at our office for the whole time and we will try and answer as many of the information requests/questions as we can to shield the management team and the finance department, but our experience (especially on a PE deal) is that the level of interrogation is intense. You can expect a typical financial due diligence report on a PE deal to be 80 to 100 pages long.
Our practice is to roll our sleeves up and work really hard to support the finance team and our experience is that this will be key in getting through the financial due diligence. Even if your MI is good, you will need your advisers on the ground day in, day out, to support the FD/finance team once diligence starts, so they can concentrate as much as they can on their day job.
FREQUENTLY ASKED QUESTIONS (CONTINUED)
How much involvement will the directors be expected to provide?
The PE house will want the continuing team to be buyers of PE input and not sellers of the business and will therefore want to spend time with them, especially nearer completion.
With the exception of helping to prepare the information memorandum/business plan and the management presentations to prospective PE houses, JDC always try and minimise the exposure of the management team pre heads of terms.
Post heads of terms, the financial due diligence will mainly be focused on the finance team (especially the FD) and commercial due diligence will be with the whole of the management team at various stages. Each of the management team will also have to go through management diligence.
Each of the management team will be asked to warrant the accuracy of the due diligence reports and therefore will have to have input into the process and get comfortable that the reports are accurate. It is important that the reports going to the investment committee of the PE house are accurate and portray the business correctly. JDC manage the whole due diligence process on the ground to take as much burden off the team as possible. We are also happy to have very early/late sessions with the team to deal with due diligence and other deal issues to leave the team free to run the business during the rest of the day.
When entering into an MBO situation with an equity house there is a common dilemma; on one hand we are representing the founding shareholders and want to get the best price as a seller and on the other hand we perhaps want a ‘lower’ price as a ‘buyer’ of PE input to prevent undue gearing and debt. How is the right balance achieved?
The key is getting the balance of the deal right. In reality the deal will not happen unless the founding shareholder is happy with his/her deal, but unless the PE house is comfortable that the management team is incentivised by the deal and there is enough left in the tank/business plan to really get them to go for growth, then the PE house will not do the deal.
Often you might find that a PE house raises a potential conflict of interest with an adviser both working for the founder and management team as one is a buyer and one is a seller. In our experience, bringing in additional advisers/lawyers just causes trouble/additional costs and does not work in practice. It is also helpful when a founder is rolling over meaningful value into Newco as he/she also wants the best terms for their roll over value.
Our approach is to agree at the outset (before we even talk to PE houses) a deal between the founder and management team that works for everyone, as once we start talking to PE houses we would want all the team to be united in the deal we are trying to achieve and to be ‘singing from the same hymn sheet’. JDC are very used to dealing with these situations.
A transaction will no doubt be on a debt free/cash free basis in which case how much stock and working capital should be expected to remain in the business at the point of the deal?
Typically we try and negotiate that a normalised level of working capital is left in the business based on an average of the last 12 months working capital. This is a tried and tested methodology to ensure that the right level of working capital is left in the business and protects both the buyers and sellers.
On a PE deal with a strong growth story over the next 12 months, typically reference is also made to the last six months actual and six months forecast working capital to give a blended normalised working capital position to ensure the business is well funded. This is key to ensure you can service the new debt structure.
Our advice is always run the business assuming that the deal will not happen, as typically this leads to the right decisions being made for the benefit of the business and ultimately the deal. We are always happy for you to run any key working capital/capex, etc decisions past us before committing, so we can advise on the implications for the deal. We will also undertake detailed working capital calculations during our due diligence on the business.
Is there access to further funds if the growth/business plan requires them (either for capital investment or acquisition)?
It is important in selecting the right PE house to make sure they have big enough pockets to be able to provide additional development capital/acquisition capital if the right acquisition opportunity comes up and it cannot be fund led through debt funding/cash in the business.
This would normally lead to a dilution of equity, if further funds are made available and would be a decision to be made at the time. We love to stay close to clients to help with follow on acquisitions/advice as needed.
PE houses are usually very keen to support existing portfolio companies and management teams with these types of opportunities, as it is easier to commit funds to teams they are already comfortable with, compared to new investments.
SectorOil and Gas
LocationUK - Head OfficeOperations - Worldwide
DealPE Investment
The business
Leading global oil and gas engineering company providing innovative products and services to the industry.
Founded in the UK in 2005, the business is now recognised worldwide for its engineering excellence.
High quality, experienced and ambitious management team.
Strong platform for future growth with significant market opportunities.
The deal
Majority equity investment from EV Private Equity, a specialist global oil and gas private equity investor.
Partial exit of founding shareholders with cash out and equity for the senior management team.
Substantial development and acquisition capital to support a detailed business plan.
Incentive structure introduced for wider management team.
JDC value add
JDC has been Aquaterra’s retained adviser of choice for 10 years.
Acted as lead adviser in a competitive process, sourcing the investor, negotiating and managing the deal from the start to a successful conclusion.
Achieved a strong valuation and attractive equity structure for both shareholders and management.
JDC’s hands on approach minimised management team distraction from running the business.
Majority Investment in Aquaterra Energy
CASE STUDIES
Aquaterra Energy on JDC
“We would not have closed this deal without JDC’s advice, support and deal management skills. From day one to the close of the transaction they were excellent. The whole management team (and our investors) are looking forward to continuing our long and successful relationship as we continue to grow our business. Thank you JDC!”
George Morrison, Managing Directorof Aquaterra Energy
SectorEnergy & Utilities
LocationNorwich, Norfolk
DealMinorityInvestment
The business
A leading provider of specialist consultancy, intelligence and training services, relating predominately to regulatory, policy and commercial aspects of the Great British energy and water markets.
Long-standing reputation with a wide ranging customer base, incorporating the ‘Big 6’ energy firms, global gas and electricity producers, regulators and governments.
Operating from premises in central Norwich, with wide ranging coverage of the UK and mainland Europe.
The deal
Minority investment from the Business Growth Fund, the UK and Ireland’s most active investor in small and medium sized growing companies.
Partial exit and cash out for the founding and legacy shareholders, with significant equity for the senior management team.
Substantial development and acquisition capital investment to support the business plan, incorporating the opening of new offices and international expansion.
JDC value add
Worked with the company since 2015, advising on market valuation, the various strategic options available to the board and advice on timing.
Acted as lead adviser to both the company and shareholders, sourcing a number of equity investors and then negotiating and managing the investment through every stage to completion.
Achieved a valuation and equity structure that met the requirements of both the shareholders and the management team.
Minority Investment in Cornwall Insight
Cornwall Insight on JDC
“I found the advice and input from JDC to be invaluable, providing clear direction on what was required, working alongside the team to ensure all the deliverables were met. I am under no doubt that without the support of Dave and Adam in leading and managing the transaction, alongside James in the creation of the detailed financial models, that we would not have concluded the process within the agreed time-frame.
We would strongly recommend JDC to companies who are looking to unlock growth and achieve their full potential and look forward to continuing to work with JDC as our trusted advisers in the future.”
Gareth Miller, Director of Cornwall Insight
SectorOil and Gas
LocationUK Subsidiaries - Worldwide
DealPE Investment / Disposal
The business
A market leading provider of turnkey asset integrity services for upgrade, refurbishment and recertification of key oil and gas structures.
Founded in the UK in 2007. Now operating from locations worldwide.
Strong platform for future growth with significant number of product and market opportunities.
The deal
Majority investment from US Private Equity firm.
Full exit for founding shareholder.
De-risking for management team/shareholders.
Remaining shareholders staying involved in the business.
Significant development capital available to support the management team’s growth plans.
JDC value add
Acted as lead adviser, project managing and negotiating deal from start to a successful completion.
Achieved strong valuation with an attractive incentive structure on delivery of growth.
Full global due diligence support to management team.
JDC ran the deal to minimise management team distraction from running the business.
Majority Investment in Project Nelson
Project Nelson on JDC“We engaged JDC because of their successful track record in our industry and the confidence we felt in their ability to secure the best possible deal. The hard work and commitment of Dave and the JDC team was invaluable in providing hands-on support to the management team through a very intense due diligence process and negotiating key aspects of the deal to a successful conclusion.
It has been a pleasure to work with the team and we would not hesitate to recommend JDC to any business considering a transaction.”
Director, Project Nelson
SectorEnergy & Utilities
LocationNorwich, Norfolk
DealMinorityInvestment
The business
Fast growing, diverse global energy services provider.
European market leader for field deployed rotor blade repair and maintenance.
Skilled engineering services provider to the deep water drilling industry based in Las Palmas, Canaries.
Founded in 2008 in Great Yarmouth, now head-quartered in Hull UK.
The deal
Minority equity investment of £5.4 million from Maven Capital Partners.
Full exit of two founding shareholders.
De-risking for the rest of the management/shareholder team.
Significant development capital to support ambitious growth plans.
Experienced industry chairman on board.
JDC value add
Acted as lead adviser, project managing and negotiating deal from the start to a successful conclusion.
Ran a competitive process with strategically selected Private Equity houses.
Achieved strong valuation multiple and attractive equity structure.
Restructured to new UK group from separately owned entities.
Equity Investment in GEV Group
GEV Group on JDC“We engaged JDC due to their successful track record in our sector and the immediate confidence we felt in their ability to secure a deal with the right structure for all parties within our Shareholder Group. Dave Howes and his team guided us through every step of the transaction, providing advice and acting as an effective filter during due diligence, allowing us to run our business in parallel.
Their commitment, negotiation skills and selection of the right partner in Maven went way beyond our expectations of our corporate finance advisers. We made a good decision to appoint JDC and I have no hesitation in recommending them to any business owner considering a transaction.”
David Fletcher, CEO of GEV Group
SectorOil and Gas
LocationHouston, TexasFrimley, Surrey
DealPE / VC Investment
The business
Fast growing global provider of patented resin coatings to complex corrosion situations.
Solutions across multiple industries including oil & gas, utilities, power production, mining and manufacturing.
Founded in 2009 in Houston, Texas. Now head-quartered in UK.
Presence in 30 countries across seven continents.
The deal
Minority equity investment from Octopus Investments.
Full exit of four founding shareholders.
De-risking of the rest of the management/shareholder team.
Development capital to support ambitious growth plans.
Experienced industry chairman on board.
JDC value add
Acted as lead adviser, project managing and negotiating deal from the start to a successful completion.
Ran a competitive process with strategically selected Private Equity houses.
Achieved double digit valuation multiple.
Restructured to new UK group from separate entities in the US and Panama.
Equity Investment in Oxifree
Oxifree on JDC“JDC provided quality advice and service throughout the complex process, helping to find an excellent partner in Octopus and also ran an exceptional process to deliver a double digit valuation multiple to the stakeholders. Their hard work and commitment was instrumental in supporting us and we could not have secured the deal without them.
It was a pleasure to work with the team and I would be happy to recommend them to anyone considering a transaction and post deal Dave has become a key and most trusted adviser to the management team at Oxifree.”
Ed Hall, CEO of Oxifree Global
SectorOil & Gas / Renewable Energy
LocationGreat Yarmouth, Norfolk
DealPE Investment
The business
A leading provider of control and instrumentation services.
UK’s market leader in the provision of manpower resources to the rapidly expanding renewables sector.
Headquarters in Great Yarmouth, UK with extensive overseas operations.
The deal
Equity investment of £10m from the Business Growth Fund.
Substantial equity release for owners/founders.
Substantial growth capital to fund future growth.
Options awarded to ambitious and talented management team.
JDC value add
JDC liaised with several competing Private Equity houses to ensure the best deal was achieved.
Acted as lead adviser through each stage of the investment from initial contact, through valuation and negotiation to completion.
Ensuring that 3sun were well positioned to deliver further growth in annual revenues and make further acquisitions.
Fulfilled founder’s immediate ambitions.
Minority Investment in 3Sun Group
3sun Group on JDC
“As our key adviser from day one, Jon has provided an irreplaceable source of advice, support and experience in all of our transactions and virtually every other area of our business development. The additional support available from the team at JDC has also been spot on. It is great to have experienced advisers who we trust implicitly and who are genuinely committed to us and our business.”
Graham Hacon, Founder of 3sun Group Limited
OUR RANGE OF SPECIALIST SERVICES
Through our business growth services we provide external advice or hands-on interim management support to a wide range of clients. Our services include:
business plans • financial projections • refinancing • tailored MI • non-exec services • cash flow management • development strategy • turnaround.
Whether a first time purchaser, a serial acquirer or an MBO/MBI team, we have the knowledge and experience to assist in all aspects of the acquisition process including:
target searches • target appraisal • valuations • funding • due diligence • negotiation • deal structuring • integration strategy.
We specialise in advising on full, partial or structured exits, retirement sales, divestments and equity release. Our services include:
pre-sale advice and preparation • information memoranda • contacting targets • negotiating and structuring the deal • advising on post deal issues • accelerated M&A.
The restructuring of a company or a group of companies involves financial, structural, strategic and tax based considerations. We are specialists in:
financial restructuring and refinancing • de-mergers • divestments • succession planning • capital extraction including company purchase of own shares.
We are very well connected to many Private Equity and venture capital funds and focus on matching the best placed investor to the right deal. We can help with:
pre-investment preparation • deliverable deal structuresand IRR models • investorprofiling • businessplans and sensitisedfinancial models •leading managementpresentations • negotiatingthe deal • projectmanagement • advising onpost deal issues.
Understanding the tax planning opportunities and avoiding tax traps and pitfalls is at the core of all our planning work. We are specialists in: _______
all aspects of transaction tax • corporate reconstruction • share option arrangements • investment and reinvestment relief • tax effective income extraction • tax effective capital extraction • inheritance tax planning • specialist tax clearances.
Business Growth Acquisitions Disposals Reorganisations Private Equity Specialist Tax
Talk directly to any of our senior team:
Jon Dodge FCA CF MEWI
m: 07775 696809e: [email protected] Jon has over 25 years’ specialist corporate finance and advisory experience. Before forming JDC he was a corporate finance and tax partner in PKF.
Chris Adlam FCCA
m: 07786 166927e: [email protected] Chris has over 20 years’ experience advising businesses through all stages of the corporate cycle. He joined JDC from PWC.
Dave Howes FCA MBA CFm: 07500 858143e: [email protected] Dave is JDC’s Corporate Finance Director and has spent 10+ years advising clients across East Anglia. He joined JDC from Grant Thornton.
Tony Longman CTAm: 07342 887680e: [email protected] Tony has over 25 years’ experience as a specialist tax adviser and has previously led teams at KPMG and Grant Thornton.
CONTACT US
Main Office
Dencora Court2 Meridian WayNorwichNR7 0TA
Essex Office
The Dutch BarnOld Park Farm, Ford EndChelmsfordCM3 1LN
Contact
T: 01603 703177E: [email protected]
Raising the bar
Copyright © JDC Corporate Finance. All rights reserved. This publication or any portion thereof may not be reproduced or used in any manner whatsoever without express written permission of JDC Corporate Finance. JDC Corporate Finance is not authorised under the Financial Services and Markets Act 2000 but we are licensed by the Institute of Chartered Accountants in England and Wales and are able in certain circumstances to offer a limited range of investment services to clients. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide. The information provided in this publication is for general guidance only and expert advice should be obtained in relation to your specific circumstances.
