Public to Private Management Buy Out (MBO):
Business Services and Private Equity
The Situation
A UK based global business services company wanted to transform their business, however felt this could only be achieved as a private company with private equity support. The proposition for the MBO involved transforming the business from a traditional country based structure to a functional organisation, in order to allow the company to focus on strategic growth areas. It was to reposition the company from being perceived as a consultancy (low P/E ratio) to a software as a service company (high P/E ratio).
The Approach
During the weeks prior to the announcement of the MBO offer we worked with the Board to develop, prioritise and resource the transformation plan. We worked with the various external advisors to the old and new companies to develop the communications strategy and materials for customers and for staff in each of the countries around the world. We then rolled out the communications from the initial announcement, through regulatory clearance to eventual de-listing. Once the offer was accepted we worked up and implemented the new Corporate Governance structure, incorporating the shareholder’s agreement with leading practice in corporate governance. Finally we kicked off the first projects of the transformation programme and implemented the programme governance, before handing over to staff we helped train in the company.
The Outcome
All customers were kept fully updated on the MBO and the transaction served to strengthen the relationship with them. Despite legal restrictions, all staff were brought up to speed on the MBO at the earliest opportunity and had the chance to quiz the directors about the new strategy. Throughout the MBO phase there was no negative impact on the business, in fact results for the quarter after the MBO were above expectations. Corporate governance was maintained throughout the transaction and was used to hard wire in the new organisation structure. Based on the success of the new company's strategy and their global footprint, the company attracted the attention of a much larger US company, who then acquired them.
A UK based global business services company wanted to transform their business, however felt this could only be achieved as a private company with private equity support. The proposition for the MBO involved transforming the business from a traditional country based structure to a functional organisation, in order to allow the company to focus on strategic growth areas. It was to reposition the company from being perceived as a consultancy (low P/E ratio) to a software as a service company (high P/E ratio).
The Approach
During the weeks prior to the announcement of the MBO offer we worked with the Board to develop, prioritise and resource the transformation plan. We worked with the various external advisors to the old and new companies to develop the communications strategy and materials for customers and for staff in each of the countries around the world. We then rolled out the communications from the initial announcement, through regulatory clearance to eventual de-listing. Once the offer was accepted we worked up and implemented the new Corporate Governance structure, incorporating the shareholder’s agreement with leading practice in corporate governance. Finally we kicked off the first projects of the transformation programme and implemented the programme governance, before handing over to staff we helped train in the company.
The Outcome
All customers were kept fully updated on the MBO and the transaction served to strengthen the relationship with them. Despite legal restrictions, all staff were brought up to speed on the MBO at the earliest opportunity and had the chance to quiz the directors about the new strategy. Throughout the MBO phase there was no negative impact on the business, in fact results for the quarter after the MBO were above expectations. Corporate governance was maintained throughout the transaction and was used to hard wire in the new organisation structure. Based on the success of the new company's strategy and their global footprint, the company attracted the attention of a much larger US company, who then acquired them.