Summer I D E A L 2009

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The Summer '09 edition of BCMS Corporate's magazine iDEAL featuring market news, deal news from the UK and USA, case studies and related M&A information.

The Summer '09 edition of BCMS Corporate's magazine iDEAL featuring market news, deal news from the UK and USA, case studies and related M&A information.

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  • 1. M &A NEWS FRO M B CM S CO R P O RAT E OR AT SUM MER 2009 i D E A LA c h i e v i n g y o u r i d e a l e x i t PREPARING YOU TO SELL Why personal preparation can be essential to a successful company sale www.bcmscorporate.com INSIDE: FREE SERVICES DEAL COMPLETIONS PREPARING YOU TO SELL CHINA DEVELOPMENTS M&A SECTOR EXPERIENCE INVESTORS IN PEOPLE N-XDs M&A TERMINOLOGY INTERNATIONAL NEWS PHILANTHROPY SUCCESS GALLERY
  • 2. FREE SEMINARS What exactly is our refreshingly different approach to the sale process of privately owned companies and what makes it so successful at maximising sale prices? D uring our free, morning seminars we reveal how our approach to selling companies works and why this, as opposed to the traditional methods, leads to a maximised sale price. A step-by-step guide takes attendees through our sale process, from preparing a company for sale, contacting potential acquirers and receiving offers through to price negotiation and sale completion. A fascinating collection of case studies provide many invaluable lessons. In addition, this seminar covers the four key issues which must be addressed if a maximised sale price is to be achieved. Our process achieves maximum offers which are, on average, 2.5 times higher than the initial offer received for a company. This difference typically equates to the generation of hundreds of thousands or millions of pounds more for business owners. If you would like to book onto one of the seminars below, which attracted nearly 2,200 business owners last year alone, please visit www.bcmscorporate.com or call 01635 296191. Our website also lists further seminar dates and locations in 2009. Next seminar dates Tues 4th Aug Salisbury Salisbury Racecourse Tues 11th Aug Cambridge The Belfry Tues 18th Aug Edinburgh The Academy Holiday Inn Wed 2nd Sept Huddersfield Bagdon Hall Tues 8th Sept Nottingham The Belfry Tues 15th Sept Maidenhead Fredrick’s Hotel Tues 22nd Sept Exeter Woodbury Park Tues 29th Sept Dudley Copthorne Merry Hill Free and confidential business evaluation meetings If you would like to discuss the sale of your company in more detail we offer free business evaluation meetings at which you can discuss your exit plans and find out more about us and how we can assist you in achieving a maximised sale price. To arrange a business evaluation meeting please call 01635 296191. Video interviews of past clients Is our service really as good as we claim? Find out what six business owners, who used our refreshingly different approach to sell their companies, thought of our process at www.bcmscorporate.com. Questions covering all aspects of our service, from the initial stages right through to completion, ensure compelling viewing. 2
  • 3. i D E A L “I trust you will enjoy the articles in our Summer issue of iDEAL. The nature of our business gives us very precise information on current business activity in the UK, amongst both SME’s and larger corporates. I have to say that our observations are often at variance with the so-called “official statistics.” The trouble with statistics is that anybody can put any slant on them which suits their argument! I suppose that is why a cynic once said, “There are lies, damn lies and statistics – in that order!” In this issue of i D E A L BCMS Corporate is privileged to be in the front line when it comes to observing the amount of business activity in the UK, with hundreds of companies and business organizations Deal completions page 4 A selection of just some of the deals BCMS Corporate has feeding us real up-to-the-minute sales and production data, as completed in the last quarter well as forecasts of expected order levels. Every month we speak with hundreds of M.D’s who tell us what is happening in their market sector, how they are affected by the global Preparing you to sell page 6 Preparing a business for sale is a recognised requirement economy and what they see happening in the future. Just as but should business owners prepare themselves too? important, we speak to hundreds of potential acquirers to get their perspective on current and future buying intentions. A creative approach in China page 8 Here in the UK we have observed that over the last three Expansion into China with the establishment of new links months there has been a welcome resurgence of activity in the into the creative industry M&A market. For example, last month we located nearly 500 potential purchasers who expressed an interest in purchasing our client companies and who were willing to sign NDA’s to progress discussions. This compares favourably to the Your questions answered page 10 interest we achieved early in 2008, before the financial crisis Is specialist M&A help really necessary for your industry? took hold. As further proof of acquirers serious buying Invest in success page 11 intentions, we recorded as many accepted offers in June 2009 Our perspective on developing human resources as we did in June 2008. and the IiP standard Sometimes purchasers have difficulty in financing an acquisition, so we have set in place a panel of funding Non-executive directors companies who may be able to assist a purchaser if he wishes and private companies page 12 to borrow £2 million - £20 million, or even more. Shuna Stirling from Brodies LLP on the role of N-XDs For any owner who is contemplating selling his/her business, it may be appropriate to think of selling sooner than later. First, as I mentioned, there are still plenty of interested buyers in privately owned companies out there despite all the doom and gloom you read about in Terminology explained page 13 the Press, and second, it may be wise to take action before the What is a ‘Heads of Terms’ document? proposed new taxes hit both high earners and all businesses International news page 14 in the next financial year. In the meantime, I hope you find iDeal magazine stimulating BCMS Corporate opens a new office in Canada and helpful”. Philanthropy page 15 Charitable work by BCMS Corporate staff Brian Rebbettes - Chairman iDEAL is published quarterly by BCMS Corporate, Kingsclere Park, Kingsclere, Newbury, Berkshire, RG20 4SW, UK and is copyright protected. Reproduction in whole or part without written permission is strictly prohibited. While every care has been taken during the preparation of this magazine, BCMS Corporate cannot be held responsible for the accuracy of the information herein or for any consequence arising from it. BCMS Corporate accepts no responsibility for the views expressed by contributors. Opinions expressed do not necessarily reflect BCMS Corporate policies. The articles in this magazine are intended to be for general information only and should not be used as the basis for divestment decisions. BCMS Corporate, its staff and contributors do not accept any liability for any loss suffered by readers as a result of decisions made purely on the basis of the contents of this publication. Professional advice should be taken in relation to all divestment decisions. BCMS Corporate is a trading style of BCMS Corporate Limited. 3
  • 4. BCMS Corporate• D e a l co m p l e t i o n s Utility Cost Analysis sold to fellow energy consultants M&C BCMS Corporate has completed the sale of Utility Cost Analysis (UCA) to fellow energy consultants McKinnon & Clarke (M&C). U CA specialise in reducing the cost bills to date), safeguarding staff jobs strategically motivated potential of electricity, gas and water for in the process. The new owners of the acquirers, after exhaustive research industrial, commercial and public company, M&C, are one of the world’s and qualification, can pay off for both sector organisations in the UK. best known energy consultants with a companies. There were natural Headed up by Ashok Sharma, the network of offices throughout the UK, synergies between the two companies company, which has offices in Europe, Asia and the US. because they both work in the energy Maidstone and Stockport, approached Says Ashok Sharma, Managing consultancy sector, they had BCMS Corporate on the Director of UCA: “We’re delighted to complementary client bases and there recommendation of its accountant to have completed the sale to M&C with was a strong will to do the deal on search for a suitable buyer to help the help of BCMS Corporate and look both sides from an early stage in take the business forward. forward to working together to take negotiations. I am confident that UCA BCMS Corporate were brought in by the business forward.” and its clients will benefit hugely UCA to oversee the sale of the from now being part of the successful Adds Steve Marston, Deal Leader at business (which has helped over 350 M&C brand.” BCMS Corporate: “This is a prime clients save money on their utility example of how our aim of targeting Empower expands its Swedish operations to industrial maintenance The Finnish Empower Group, with 3,000 employees, has acquired all shares in the Swedish Scancon Group, with 3 companies and 250 employees, specialising in mechanical B maintenance supplies. ars Berglund, from BCMS effective BCMS Corporate process, are “Empower’s aim is to build a strong Corporate’s Scandinavian office, still very attractive. In fact, as normal foothold in the Nordic Countries and managed the project, assisted by his for a BCMS Corporate assisted sale, the Baltic Sea region in the energy, colleague Göran Porse. Due to the the final sale price achieved for telecom and industry sectors. The complexity of the Scancon Group and Scancon was more than double the acquisition of Scancon is a logical step the impact of the present world first bid received. in our expansion strategy. The financial situation on some potential “We wanted to strengthen Scancon’s acquisition will provide us with a buyers, the process time was more position in Sweden, Finland and solid growth platform for expanding prolonged than usual. From being Norway. The now contracted merger our services in the industry sector. awarded the sales mandate to into Empower Group was regarded as The Scancon acquisition will completion took close to 24 months the best option to implement this complement our existing competence but nevertheless, the completion of growth strategy. By this change we in Finland”, says Aappo Kontu, the this deal and many others over the also extend Scancon’s expertise to president of Empower Group. last three months confirms that services for pulp and paper industry Both Scancon and Empower have en- buyers are active and good segments”, said Bengt Öhrblad and thusiastically expressed their full companies, when taken to market via Gunnar Spolander, the main satisfaction with the work done. the comprehensive and highly shareholders of Scancon Group. 4
  • 5. BCMS Corporate• D e a l co m p l et io n s Deal summary GB Seeds Potential acquirers identified 276 BCMS Corporate Non-disclosure agreements signed 2* Qualified acquirer shortlist 1 plants the perfect deal for 1st and revised offers Deal duration (months) 1 11 GB Seeds * Only 3 potential acquirers contacted at client request Utility Cost Analysis GB Seeds has been acquired by Masstock Arable Potential acquirers identified 191 in a multi-million pound deal. Non-disclosure agreements signed 38 G Qualified acquirer shortlist 8 B Seeds, which is based in Corporate since the turn of the 1st and revised offers 2 Ingham, near Bury St year, and based on current Edmunds, is one of the country’s activity, 2009 looks like being Deal duration (months) 10 best-known independent seed another highly successful year. wholesalers. Founded in 2000, Says David Cribbin, Managing Deal summary key following a buy-out from the long- Director of Masstock Arable: “The Potential acquirers identified: the number of prospects established seed business of addition of the GB Seeds business identified by our in-house team of researchers through George Burlingham and Sons, the strengthens Masstock’s existing directors of the company, led by their initial desk research. seed offer which we view as Managing Director, Richard strategically important for the Non-disclosure agreements (NDA) signed: the number Mason, had been looking for a future. GB Seeds bring of NDA’s represents the number of potential acquirers suitable buyer for the business. complementary seed processing which have indicated an interest in our client’s business BCMS Corporate was brought in expertise and as such offers us the by requesting further information. Before this is given by GB Seeds during the second opportunity to diversify into new an ‘NDA’ is signed by them. half of last year to oversee the sale markets.” Qualified shortlist: the result of an exhaustive process of the £15m turnover business. Adds Sunita Meigh, Deal Leader undertaken by our project managers to ensure the most The new owners of GB Seeds, at BCMS Corporate: “We are Masstock Arable, are a leading suitable potential acquirers are taken through to the thrilled to have successfully R&D-led supplier of agronomy latter stages of the deal. completed the sale on behalf of advice, input products and farm the directors of GB Seeds and are 1st and revised offers: the result of our work to ensure consultancy services based in confident that everyone within the the post-deal benefits of the acquisition are clearly Cheltenham. company will benefit hugely from understood by the acquirers. The sale of GB Seeds is one of being part of Masstock Arable Live to market: the point at which our specialist many deals completed by BCMS moving forward. Prospect Generation Team start to speak to potential acquirers about an opportunity to acquire a client company. 5
  • 6. BCMS Corporate• P r e p a r i n g yo u to se l l Preparing you to sell Selling your business is likely to be a once-only experience, so how do you prepare for something which you have no experience of? Preparation of your business and how to document its strengths is clearly advisable but, often overlooked, is an important element of preparation – preparing you, the owner, for the process. Ask any acquirer what is most important to them in making investment decisions – invariably the ‘people’ factor will be number one or two on their list. Soft issues – chemistry, rapport, culture, call them what you will, are key elements of selling a business. I am sure like me, in certain is not to dismiss these methods of appreciation or mastery of soft circumstances, things which you preparing for ‘out of your comfort issues), but the best qualified person, would ordinarily ‘take in your stride’, zone’ events, some undoubtedly have at least in terms of knowledge is you, suddenly become so much more merit, but shortcomings in this the owner, and given the right difficult. This can happen, in instance are simply a product of the coaching, founded on our experience particular, when you are out of your relative rarity of experience to of thousands of business sale ‘comfort zone’ and the implications underpin the advice. Most people negotiation meetings, this has to be are so much more important than just never sell a business and those that the right option. day-to-day events. Everyone has their do, rarely repeat the process, so most BCMS Corporate was established by own ways of dealing with these of the available help is not specific entrepreneurs who have experienced situations, some more effective than and relies on third-hand knowledge selling their own busineses others. What all techniques fall back and possibly, a good deal of guess- previously. All the emotions, stresses on though is preparation and work and assumption. and frustrations which occur when practice. Literally thousands of books Clients frequently tell us that the selling a business, the Directors have have been written on the subject of most daunting aspect of selling their experienced first-hand. This sobering performing well in stressful or business is meeting and presenting to experience was the seed of the idea to unfamiliar business situations and potential acquirers. Many acquirers include vendor ‘coaching’ as part of there is no shortage of consultants are ‘old hands’ at negotiating with what we do today for our clients. To and business coaches who will profess vendors and very aware of the get clients ready for face-to-face to provide solutions. experience deficit on the part of the meetings with potential acquirers When it comes to selling your seller in these situations. they all go through a ‘Dry-run’ business, generic self-help books, So what’s the meeting. This meeting, as its name general business or presentation answer to suggests, includes a run-through and coaching can have limited impact. addressing the rehearsal, where mistakes have no Few business authors or coaches have knowledge and financial or negotation consequences, experienced what you will experience experience in preparation for the entire life-cycle when you sell your business. Very few deficit? You of the sale and crucially those face-to- will have been in the situation where can let face meetings with acquirers. We ‘lift the success or otherwise of selling, someone else the lid’ on the tactics acquirers are what for most business owners is their do the talking, perhaps your likely to adopt, give guidance on ‘most valuable asset’, is at stake. This accountant (not renowned for their countering them, prepare you for all 6
  • 7. BCMS Corporate• P r e p a r i n g yo u t o se ll the questions which will inevitably meetings between our clients and I think it’s fair to say there is crop up and coach you how best to the potential acquirers. The ‘Dry- slightly greater margin for error present the benefits of the proposed run’ is part of a process designed to when selling a business but acquisition. ensure that we move, in stages, interestingly, in 30% of transactions In most cases our clients have, at successfully towards the intended BCMS Corporate completes , after a some point in the history of their goal. comprehensive identification, business, experienced more generic At risk of being accused of going introduction and qualification coaching or consulting. It is fair to off at a tangent, there is an anecdote process, the first acquirer that comes say that many come to these which acts as a perfect metaphor. to the negotiating table buys the meetings with a healthy degree of Dave Rebbettes, a founding director business. The keenest potential scepticism but leave with confidence of BCMS Corporate, is a keen aquirers with the strongest motives about the process and most yachtsman. Even on a relatively will, if possible, want to assess the importantly, how to handle those short trip, he tells me that a degree opportunity early on – this first situations where the stakes are or two out in terms of plotting a meeting cannot be used as a trial highest and the stress levels peak. course can result in missing the run, preparation must be intended destination by 50 miles or meticulous. These vitally important ‘Dry-runs’ are delivered by our Deal Leaders more. Time spent preparing, Sticking with the nautical theme, who work with our clients checking and re-checking is vital to what we aim to do is prevent you throughout the term of the business ensuring you get where you want to arriving in Marseilles when you are sale. In addition to these ‘coaching’ go. Seemingly small details can have heading for Cannes! sessions our Deal Leaders host a profound effect on the end result. 7
  • 8. BCMS Corporate•China A creative approach in China Since writing the Spring issue of iDeal members of the BCMS Corporate management team have once again been in China to progress opportunities. As outlined in last issue’s article ‘Look East’, we are very bullish about China and are driven by two primary objectives: To replicate what we do in the UK for business owners in China and to provide BCMS Corporate clients in the UK and elsewhere with a distinct advantage if the most suitable buyer happens to be a Chinese company. B CMS Corporate has now signed co- China and we will be bringing these "From this fact-finding visit and the operation agreements with, companies into the bidding process information gathered we now have a amongst others, the China Guanghua where appropriate. much better understanding of the Foundation (GHF) and the Dragon Below are extracts from an article Chinese creative industry. We will Design Fund of China Guanghua published in ‘Beijing Business Today’ publicise this understanding in the Foundation (DDF) which work with based on an interview with Steve West. Through the co-operation with environmental and design-based Rebbettes, BCMS operations director, DDF, we have gained a deeper industries in China. What has become about our co-operation with DDF. appreciation of China's creative very apparent on our trips to China is industries and seen for ourselves that that there has been a marked shift in original design, research and Chinese creative industry is a "rich focus from an agricultural, development activity is very strong seam" for British entrepreneurs manufacturing and export economy "Foreign media reporting about here" said Steve. towards a more innovative, hi-tech China can often be negative, a economy. At present rate of growth, common theme is that China's Co-operation with DDF - first time benchmarked by patent registrations, creative industries are 'pirated' or into Chinese creative industry routinely copy from other countries. As a UK M&A specialist, BCMS China will become the World’s most In my first visit to China last year, I Corporate’s core business has innovative nation by 2012.* found that China's creative industry is traditionally operated in Europe; We met with five prospective client China is its first venture into Asia and very advanced, it is a 'rich seam' in companies on our last trip, four of its co-operation with DDF is an my eyes,” says Steve Rebbettes. which are in the environmental and important part of its work in the creative sectors and all had The Chinese creative industry may Chinese creative industry. "BCMS significant IPR and patented be one of the best kept secrets in the aims to provide M&A services to the technologies, are enjoying very rapid World. To date, China’s reputation Chinese creative industry – the main revenue and profit growth in the has predominantly been as a source reason we have chosen to work with home market and all have global of cheap labour. "Made in China" is a DDF is that through its own work, it potential. We also met with a number stamp often seen on goods produced has attracted the best creative talents of Chinese companies actively seeking for Western markets, not least of in China. BCMS Corporate hope to investment opportunities outside which, is the very high percentage of provide a platform for these great goods for the US and UK consumer. creative talents to open up better The very significant shift to a more prospects for growth – at the same innovative and hi-tech economy time, deploy its professional M&A that has been taking place services, to meet the precise needs of over the last decade in SMEs in attracting investors and China though, has provide a further boost to growth at gone largely home and in overseas markets." unreported in the West. To this end, BCMS and DDF have signed a co-operation agreement to provide a service to Chinese companies enabling them to assess, and then, where appropriate, access international financial & investment opportunities. "At present we are looking for good opportunities, the DDF ‘Dalian Design Festival’ is a good opportunity for us to reach more businesses with a view to providing support and advice in key areas including financing, opening up overseas markets, equity transfer, as well as inbound and outbound M&A." BCMS’s Director said. 8
  • 9. BCMS Corporate• China BCMS will offer support in the " BCMS’s director said. "We hope that context of design will become Dalian Design Festival, including free by adjusting our services we can increasingly important for many seminars and lectures to deliver a perfect service to Chinese Western companies. Chinese design entrepreneurs – a large number of creative and other industries. We will talent will be, we believe, much entrepreneurs do not have experience be undertaking a limited number of sought after,” says Steve Rebbettes. in M&A, such help from BCMS is projects, and gradually adjust our Based on an interview and original invaluable. model of operation in order to article which appeared in Beijing eventually adapt to the Chinese Business Today by Reporter Nili Liu, market," he continued. The Focus on creative industry “BCMS provides services to 18th May 2009 enterprises in all industries in the Talent finding is the core strategy For more information on BCMS United Kingdom and other countries, “In the creative industry, there are Corporate and China contact Andy including the creative industry. For many exceptional companies in China Hunt, Strategy Development Manager example, we recently sold an across all sectors, the need to or, Steve Anstey, International advertising company specialising in understand Chinese culture in the Business Development Manager on advertising in Railway Stations across 01635 296191. the UK; by using us, they achieved *Souce: Thomson Reuters report, maximum value, a price significantly Patented in China, by Eve Y. Zhou, above the owners expectations,” PH.D., and Bob Stembridge. explained Steve. In addition to the creative industry, BCMS is planning to work in sectors such as energy, brands, hi-tech, environmental and other hot sectors in China, "We will make use of our professional experience and knowledge to provide the best service. In the initial stage we will proceed carefully with our China business development plan, adapting to Chinese culture, so that our service accurately reflects needs and expectations, making for a more conducive, smooth development and follow-up. 9
  • 10. BCMS Corporate• Y o u r qu e s t i o n s an s w e r e d Your questions answered In each edition of iDEAL a senior member of our management team will address one of a number of common questions we are asked by business owners. In this edition David Rebbettes, Director at BCMS Corporate reveals why experience in a particular market sector is not essential. Q : Have you sold a business in the same sector as mine? If not, why should I use BCMS Corporate to sell my company? A : This is a common enough with our clients, it is designed not to question asked of our Business funnel research in the early stages, Managers, the people here at BCMS but to open it up in order to maximise Corporate who meet prospective the prospect of finding the right buyer clients for the first time and present – obvious or not. the BCMS Corporate case for being awarded a sales mandate. There are three key considerations A structured approach We deploy a highly structured which we believe are more important approach to selling businesses; what than sector expertise and relevant to has structure can be measured and this question. Before I tackle these repeated, to deliver consistent quality though, let me just say that BCMS and results. Structure however should Corporate has sold companies, on not be confused with limiting the behalf of its clients, in almost every exercise of good judgement, the sector. We are well equipped to structured approach frees our staff to provide case studies but this, in our exercise their judgement but gives the view, can provide a false sense of clients a basis on which to measure what we are delivering security when choosing who to place a sales mandate over time, against what has been promised. Progress is with. The decision must be based on more. measured, feedback is frequent and tactics can be fine- It is not uncommon for corporate finance boutiques, tuned if required, in a timely way. other business agents or even investment banks to stress their sector-specific capabilities, something which BCMS Corporate deliberately chooses not to do. Those of you who have been to one of our weekly seminars or have Global reach We now have operations in North America, China, read our book will know that we frequently disagree with Scandinavia, Eastern Europe and Latin America. These traditional thinking when it comes to selling businesses. operations are not the result of a loose network of affiliated So why do we differ on the issue of the importance of companies but actual BCMS operations deploying the same industry sector experience and what are the three key structured approach, staff either seconded from the UK or considerations? trained here in the UK and crucially, for our ‘sales mandate’ clients, providing an extension of our ability to Avoid assumptions look not just in a companies home market, but also A sector specialist will often tell you that they know who overseas for the right buyer. This is something we believe the buyers are. This can limit an open-minded view about will be important in the next few years as companies in who the best buyers might be and prevents the widest developing markets increasingly look outwards. possible marketing of a business to find the obvious and, less obvious buyers. At BCMS Corporate we do not want I mentioned our seminars above, to view dates and our staff to view each project through the prism of a venues and to book a seat please go to our website. sector specialism and deliberately, or sub-consciously, Alternatively you can subscribe to ‘iDeal’ or request a copy discount from consideration those potential acquirers of our book online. You may prefer, if considering a sale, which don’t happen to fit a too narrow prescribed view. to book a confidential business evaluation meeting with a Every project we undertake is guided by a marketing BCMS Corporate Business Manager, if so phone strategy, developed by our research team in conjunction 01635 296191. 10
  • 11. BCMS Corporate• I n v e s t o r s in Pe op l e Invest for success Arguably, an acquirer views a target company’s human resources as its most important asset. Why? Because business goals are much easier to attain when they are aligned with the capability of human resources. How best to do this is open to debate but Investors in People (IiP) has certainly been good for us. No matter how you choose to approach it ‘investing in people’ is central to successful, sustainable businesses. P icking up on a point made by Test of time Brian Rebbettes, BCMS Corporate There are many ways in which Chairman, in his foreword to this owners have chosen to invest in their issue of iDEAL, he observes that BCMS staff, not least of which is the Corporate is in a privileged position Investors in People standard which, to receive first-hand insight into what unlike many government inspired is happening in the real world of initiatives, has stood the test of time. business - behind the headlines. The reason for this was very aptly tool. Having just undergone the summed up by MP Michael Howard in latest three-year assessment the 1991 when the scheme was launched. process has highlighted what we He said “Investors in People is a do well – thankfully the Distinct culture Although not specifically referred to overwhelming majority – and standard designed by business, which by him in his foreword, there is what we need to improve on. will be met by business, because it is another insight which also reveals a Most importantly it allows for in the interests of business. This is great deal about private businesses, completely honest feedback from why it will survive.” one which we see in our clients’ staff about their actual, and not businesses on a daily basis. Smaller The CBI, the so-called ‘employers the management’s perceived and medium-sized private businesses organisation’, came up with the experience of working for BCMS tend to have a distinct culture, original idea for IiP and no doubt, as Corporate. It also provides a particularly in the relationship which Michael Howard recognised, its framework for further investment exists between company owners and origins were based on a genuine in and development of staff, to their staff. This is almost always a understanding of business needs. keep pace with the human factor when an owner decides to sell; Perhaps another reason though for its resource challenges that the there is concern that whatever deal is survival is the lack of political overall corporate goals will done it is right for the departing interference by successive determine. owner and the employees which will governments and therefore it is continuity that has allowed it to IiP has played an important part remain with the business after it become established as a benchmark in the successful and rapid passes into new hands. In many cases, which 35,000 companies now view as expansion of BCMS Corporate in employees have been with the same a cornerstone to planning in the recent years. Some members of business from its exciting and less context of developing human staff, who have developed their predictable start-up stage, have been resources. When applied as intended, careers with the company are absolutely integral to growth and it produces in effect, a [human now based either on secondment, remain keys to its continued resource] business plan within the or have relocated to other development. Many company owners overall business plan. countries to pioneer the growth we meet have invested significant of the business. As a means to an time and money to ensure that those end, it has certainly worked for people have the skills to take on the us and our staff. challenge of new, more demanding Embracing Iip Like some of our clients, BCMS Whatever the challenges and more responsible roles as the Corporate has embraced the IiP companies face, whether business grows, leaving a new owner standard and it is viewed by the navigating a path through the with a solid legacy of well motivated, management and staff as a valuable current economic circumstances, dependable and very capable people. expansion or disposal, in our experience and that of many of our clients, investing in people has been absolutely central to success. 11
  • 12. BCMS Corporate• N o n ex ec u t i v e di r e c t o r s Non-executive directors and private companies The non-executive director (N-XD) has been a feature of the quoted company landscape for many years now, but how relevant are N-XDs to private companies? T he role of the N-XD is enshrined appointing non-executive directors in the Combined Code on and also outlines a number of Corporate Governance (Code) which practical measures to help both the provides that companies to which the company and the directors fulfil their Code applies should have a balance of roles and manage their risks executives and non-executives such effectively. that no one individual or small group of individuals can dominate the board’s decision making. Although BCMS Corporate appoints falling outside the scope of the Code, non-executive director appointing a non-executive director BCMS Corporate has recently to a UK private company may also be Shuna Stirling, corporate lawyer at Brodies LLP undertaken just such a strategy in appropriate and bring with it many appointing Paul Davis to its board as future strategy, and the current a non-executive director. Davis, who benefits, which is the subject of a composition of its board. Clearly the has already had a successful recently published paper from the process of choosing the right corporate career – both as a divisional Institute of Chartered Accountants of candidate is crucial; they must possess director with Rank Hovis McDougall Scotland (ICAS). a demonstrable capability in those and within the giant BOC Group – will “In the case of a private business, areas where the board seeks to provide a wealth of industry the appointment of a non-executive supplement its skills. An aspiring non- knowledge as well as an independent director is ultimately a judgement call executive director will also need to voice to the Company. for the executive directors,” explained satisfy themselves that they have Shuna Stirling, a corporate lawyer at Steve Rebbettes, Operations Director sufficient understanding of the Brodies LLP, a leading Scottish law at BCMS Corporate explained, “I have potential risks, how the company firm. “Whether or not this is known and worked with Paul for operates and how it deals with appropriate will depend on a number many years now and am delighted business risk,” she added. of factors including the size of the that he has decided to cement his The ICAS guidance is intended to relationship with us by joining the company, the nature of its business, help identify whether a private board of directors. As a family-run the stage of its development, its company would benefit from 12
  • 13. BCMS Corporate• N o n ex e c u t i v e d ir e ct o r s enterprise, it’s important for us to “BCMS Corporate has always based maintain an open mind and balanced its approach on being a family view, particularly when it comes to business that’s professionally run,” the strategic development of the adds Davis. “It’s a winning formula business. Paul provides exactly the and BCMS Corporate is growing right degree of independent, quickly, so my role will be to bring professional expertise to keep us added value to this approach by focussed and drive the business providing an important external forward.” perspective when it comes to running Now employing more than 140 staff, a larger business and developing a BCMS Corporate has undergone strategic approach to future growth.” unprecedented growth in the last 4 years establishing offices in North America, mainland Europe and Asia. Paul Davis, BCMS Corporate non executive director BCMS Corporate• T e r m i n o l o g y ex pl a i n e d What is a ‘Heads of Terms’ document? O nce an offer for a business has been accepted by the vendor a ‘Heads of Terms’ document is produced. This legally non-binding document, signed by both the vendor and potential acquirer, outlines the key areas of agreement between both parties. Although some variations may occur, the ‘Heads of Terms’ document typically includes a description of the business to be sold, principal conditions of the offer, the sale price, terms of payment, the nature of any vendor indemnities/warranties, due diligence partner information and an overall timetable for completion. A key benefit of the ‘Heads of Terms’ agreement is that any significant issues which may have been overlooked in the preceding price negotiation process will be highlighted and can be resolved before moving forward with costly due diligence and other legal work. Although the main ‘Heads of Terms’ document is legally non-binding it may contain two elements which will be legally binding. The first of these is an exclusivity agreement which prevents the vendor from continuing discussions with other potential acquirers for a specific time period. This is a key benefit to the potential acquirer who can then undertake the cost of due diligence without the fear of later losing the acquisition to another potential acquirer. Secondly, a confidentiality agreement, if not already in place, may form part of the ‘Heads of Terms’ document. Although this document is primarily known as the ‘Heads of Terms’ document it may also be known as a ‘Memorandum of Understanding’ or ‘Letter of Intent’. 13
  • 14. BCMS Corporate• I n t e r n a t i o n a l International news BCMS Corporate success in North America, Canada, Eastern Europe and Scandinavia. A Mediterranean North America Scandinavia news highlight from Scandinavia W and Eastern …and Canada! was the sale of Sweden’s Scancon E e continue to extend our reach Group, comprising three companies Europe inside and outside of North and 250 employees, to the Finnish xpansion in the Mediterranean Empower Group. This deal, slightly America. Dave Rebbettes, one of the and Eastern Europe is continuing hampered by the current World company’s founding directors, at a pace; we have now hosted our economic climate, still attracted an delivered two seminars in the first seminar in Romania, preparation excellent range of offers and sold for Canadian cities of Edmonton and for which was highlighted in the last a very attractive price – the highest Calgary which produced such large issue of iDEAL. The event attracted a and successful offer for the business audiences that a new office has been significant number of interested was 200% more than the lowest offer opened in Calgary, specifically to business owners to the Chamber of received. For more details, please manage the resulting influx of new Commerce and Industry building in turn to page 4. clients! Organising and assisting with Bucharest (below). Led by Mehmet the set up of the new office will be UK Soyer, expansion into Romania means Team Manager, Andy James. With BCMS Corporate operations now further seminars planned in British extend to three countries in the Columbia and other regions of region. Canada, our new office looks primed One of the fundamental challenges for a busy year ahead. for our European expansion is Elsewhere in North America communicating with business owners expansion continues with our first who speak differing languages. To this seminar in Atlanta, Georgia taking end, BCMS Corporate will shortly place this month (July 2009). launch its Meditteranean and Eastern Additionally, new clients have Europe website in three awarded their sales mandates to languages: Bulgarian, BCMS Corporate in both California Romanian and Turkish. and New Orleans. (www.bcmsaka.com) 14
  • 15. BCMS Corporate• P h i l a n t h r o p y Modern day Philanthropy A Samaritans report by The Community Safety Forum has acknowledged “Do what you can, with what you have, that Basingstoke and where you are.” Deane, as a place to live and work, is getting safer. There are a number of Quote on philanthropy attributed to Theodore Roosevelt initiatives being deployed in the area not least of which is It never ceases to impress us how much of their the ‘Street Pastor’ program which is spreading to towns time many of our staff and indeed our clients and cities across the Country. devote to community and charitable causes. Malcolm Murray, senior business manager at BCMS Corporate spends Friday evenings and into the early In each issue of i D E A L we will highlight just hours of Saturday morning as part of the Street Pastor some of the community and charitable team in Basingstoke. He said, “Traipsing round activities our staff are engaged in together with Basingstoke on a Friday night talking to teenagers, I’m details of some of the charitable projects BCMS sure, is not everyone’s idea of a good night out but Police and local councillors have acknowledged that what we do Corporate as a company also participates in. is worthwhile and has had a positive effect on the levels of anti-social behaviour. What we do is organised through Churches of various denominations but the purpose is not to preach to people, we just provide support which might be as simple as engaging young people in conversation to diffuse a potential argument or being a reassuring presence to make people feel safer when they are out and about.” He added, “Street Pastor is now well established in Basingstoke and myself and other volunteers have become a regular feature of Friday nights. We are recognised by many of the young people who will often now stop to chat – they certainly seem to appreciate that we are giving of our own time and are there because we want to be.” Street Pastors began in Brixton, London, in 2003, based on a model first developed in Jamaica. A Race for life n incredible 680,000 people took part in Cancer Research’s ‘Race for Life’ across the UK this year, raising over £62 million. One of the determined competitors was Faye Beard from our Teeside office who, along with her mother, ran the five kilometre course at Ormesby Hall near Middlesbrough, along with 2000 other P Coast to coast – by bike! people. Faye said “My mum and two aunts were all eople go a long way to raise money for charity, diagnosed with breast cancer at the same time; it is due to walking, running or swimming a variety of distances, a hereditary cancer gene in our family. ‘Race for Life’ is an all in aid of varying good causes. Few though exceed the incredibly worthwhile cause. I am glad to have taken part 26 miles of a marathon, however our Teeside-based and contributed to the fight against cancer.” Faye and her cyclist Joanne Cox undertook the challenging Coast-2- mother raised a total of £600 in sponsorship. Coast cycle route, from Whitehaven to Roker in Taking place between May and July each year, ‘Race for Sunderland, covering an incredible 130 miles! Life’ is the largest women-only fundraising event in the The route, which is officially 131.69 miles long or UK. Since 1994 over four million women have helped the 211.93 kilometres, takes an average of 14 hours, split charity to raise in excess of £240 million. over four days with a difficulty rating of 10/10. With an average of over 30 miles each day over undulating terrain, it is estimated that over the entire course the average rider burns 5333 calories. If these figures weren’t impressive enough, this is now the fourth year that Joanne has completed the course! This year Joanne rode the course in aid of the Diamond Blackfan Anaemia charity which helps people suffering with a rare blood disorder – she raised £365. 15
  • 16. Latest success gallery Please find below a small selection of our recent deals. For a full listing of these please visit www.bcmscorporate.com/success-gallery BCMS Corporate Plantagenet House Kingsclere Newbury Berkshire RG20 4SW T: 01635 296191 F: 01635 299502 E: info@bcmscorporate.com www.bcmscorporate.com