Background

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;

Issue

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.

Resolution

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.