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Disposal of Vocality International

Client: Vocality International
Service: Disposal to Cubic Corporation
Completion date: November 2016


In November 2016 Buzzacott’s Corporate Finance team completed the disposal of Vocality International Limited, an award winning provider of embedded technology that delivers critical communication solutions. The purchaser was Cubic Corporation, a US Nasdaq listed conglomerate focused on integrated communication solutions in the defence, secure communications and transportation industries. They are best known in the UK for operating the Oyster card system for TFL.

We provided Vocality with full service lead advisory support. This included: re-presentation of the financial forecasts, creation of an information memorandum, identification of prospective purchasers in conjunction with management, approaching prospective purchasers, organisation and support of meetings between both sides, negotiation on initial offers, managing the due diligence and SPA process, and overall project management through to completion.

Relationship timeline

  • July 2012, Matt Katz, Head of Buzzacott Corporate Finance, supports on obtaining debt finance through Santander’s Growth Capital Facility.
  • May 2014, management consider potential equity fundraise.
  • July 2015, Buzzacott engaged to commence sale process.
  • Post completion our relationship has continued. We have since supported them through a completion accounts agreement and the resolution of residual issues with HMRC.

A number of challenges arose during the course of the transaction, three of which we have highlighted below along with the corresponding resolution;


It was mutually agreed that the originally agreed deal structure, which included an earn-out, would be simplified to cash at completion but with a reduction in the overall price.


Having previously agreed the price, we led negotiations again to ensure our client felt they were receiving the best value for the business while ensuring that future working relationships were not risked.


The articles were not up to date which could have resulted in material Employee Related Securities charges, and a potential disqualifying event of the EMI options.


We led the communication process with HMRC which included formal written communications, and leveraging our network within HMRC to expedite the process from two-three months to three weeks.


Agreeing a working capital mechanism that was fair for both sides – with the objective being that post completion there was no material adjusting payment to be made if the balance sheet was as expected. This was particularly challenging as the purchaser had to apply US GAAP.


We agreed a compromise on several of the positions and worked with the purchaser’s team to forecast the completion balance sheet. The theoretical exercise was proven to stand the test, when the actual balance sheet was agreed six weeks post completion with no transfer required from one party to the other.

Lessons learned

  • Letters of intent are by no means the final offer, and can be negotiated during the process.
  • Identifying the right buyer can take time, especially if they are the right buyer.
  • Working with an adviser who understands the details of your business can prove crucial in negotiations.
  • An adviser can add value in more ways than just negotiation.

Take a look at a few of our other recent transactions here.

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