The Background
Unicomm is a leading provider of unified communications and wholesale telecommunications solutions. The business specialises in managing a range of hosted services, predominantly Mitel and 8x8, supplying these to a long-established SME and Commercial customer base.
Founders Gary Roberts and Simon Drew met whilst working previously for Annodata, and later utilised their Mitel specialism to form Unicomm in 2009.
The Challenge
Having built a solid customer base and reputation since establishment, the shareholders’ decision to embark on an exit process and sell the business, to such a renowned market buyer as Babble, was a simple one.
When presenting a business to a Tier 1 Buyer, it is vital that the proposition, services and supplier relationships are understood, and that the expected synergies for a larger consolidator are clearly apparent and defendable. In this journey, customer concentration initially presented a risk to the value of the business, demanding a refined focus on the proposition to avoid misleading the market, whilst presenting the business in the best light possible. This allowed our team to ensure potential buyers are aware of the issues, without damaging the valuation of the business. Moreover, it was essential to demonstrate how efficiently the business could be integrated, given its lean staff base and specific service types.
The transaction team at Evolution Capital worked to create and develop a proposition and marketing documentation, which could stand up in FDD and clearly defendable through buyer interrogation. Approaching the completion of the IM, certain challenges arose which led to our team re-configuring the proposition ahead of due diligence investigation. This required making necessary adjustments to the IM and financial data pack to reflect the true underlying performance in the business.
“Preparation ahead of a sale is of vital importance. Once a maximum value offer is secured, the most important period is the final months before completion where value can be eroded if the focus on business performance is not maintained. Our deep understanding of the business allowed us to mitigate all risks during this period”.
Sam Godfrey, Transaction Director
FDD interrogation was intense from the Babble team, demonstrating that the size of the business is not what determines the level of investigation. Our team was required to continue to deal with material changes in trading performance, in order to properly defend the business proposition and the underlying stability of the business.
Advice, Planning, and preparation
In 2019, the transaction team at Evolution Capital met with shareholders Gary Roberts and Simon Drew to understand the exit process further.
Often for most sellside clients, we find that most have not run a transaction process before, and this was the case for the shareholders of Unicomm. Evolution Capital worked closely with the shareholders of Unicomm, becoming an extension of their own team throughout the duration of the process.
Prior to entering into a business sale process, our transaction team, headed by Sam Godfrey, provided the granular analysis of the business from an objective perspective, allowing the shareholders to make decisions more effectively. Furthermore, the Evolution Capital team worked with meticulous focus to understand the intricacies of Unicomm, in order to allow the management teams the time to continue to run the business efficiently throughout the transaction process.
It was essential for our transaction team to highlight the strength of the quality of earnings in the business, which is not always apparent when looking at high level information such as the management accounts. We had to understand the nature of every single expense to accurately exclude costs which were not needed or recurring for a larger acquirer. Ultimately, specifically tailoring the preparation of the business for a Tier 1 buyer.
A Successful Outcome
Evolution Capital are delighted to announce the successful sale of Unicomm to prestigious market buyer Babble earlier this month, after working closely with the shareholders of Unicomm to thoroughly prepare the business before entering into a process in order to achieve maximum value.
Sam Godfrey, Transaction Director said;
“I am thrilled for the shareholders of Unicomm, who I worked closely with over the course of the last 12 months. Achieving maximum value is, of course, what everyone aspires to in a business sale, but it is hugely rewarding to have worked with management teams of businesses such as Unicomm from the conception of the prospect of entering into a business sale process, right through to completion.”
Simon Drew, Shareholder of Unicomm added;
“Gary and myself spoke with various advisors before both agreeing to work with Evolution on the sale of Unicomm, we came to this decision based on the confidence they gave us that they would achieve maximum value for our business and be part of the journey from the beginning to the end and I must say they were true to their word. Sam was relentless in his pursuit to make sure the value was kept within the business and by the end of the process it felt like he was part of Unicomm. Although it was a roller coaster of a journey we achieved what we set out to from the start.”
For more information on our exit services please click here
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For Babble's announcement click here
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