Do you do valuations?
We track every benchmark for different sizes of company, different types of service and different business models very closely and our data set here is the best in the business.
Be very careful, here. Any accountancy practice will claim to be able to give you a number. They’ll often use a combination of valuation models, and this simply isn’t how this market works. The key numbers are all off balance sheet typically, and sensitivities to them are much tighter than people who don’t know the market assume. Prices here also do not slide or get haggled up or down; they toggle on or off once the ‘anchor’ number is established.
As part of the NED WIN service you get a full valuation up front. Annual valuations for employee share ownership purposes can also be built in to the NED Legal service as required to help deal with both adding new senior staff or exiting staff.
There are two rules here:
(i) if you rely on just the free lunches and chats at the 19th hole, you will get a very unrealistic number in your head, and
(ii) never ever trust the numbers on a VCs press release as a guide to current market benchmarks.
It’s not rocket science; but it has to be done right.
What does it cost?
A NED subscription starts at £100 per month, ensuring two directors receive the full information and email and advisory support service. For larger groups, we agree a ‘benefiting group’ and per person prices drop accordingly. Larger firms typically see the service as a helpful training aid in ensuring market events are covered, but also that their corporate finance and competitive significance is trained in. All of our examples are competitor specific, real time and quantified. Having access to the Business Intelligence Reports as soon as they are published and throughout the year makes it a no-brainer for most. We do not insist on on-site meetings or presence at Board meetings, although many do add annual or quarterly board attendance to the package. Equally we are happy to cover annual valuations for employee shareholder scheme purposes or shareholder agreement purposes as our market insight and independence is unrivalled.
The NED WIN service depends on the expected value achieved. For a firm expecting to sell for £1m, for example, a 5 month engagement at £5k per month and a success fee of £25k is typical. If it takes longer than 5 months there is no extra charge; if it sells for more than £1m, there is no extra charge. We do not offer a contingency only service, as when working as a Buyer we have seen it skew loyalties and advice at the later stages of deals to an unacceptable degree. Most others undertaking this work (a) do not understand the market or its metrics; (b) do not know which buyers to avoid, and (c) will in reality be charging 6-8% of an enterprise value with non-returnable deposits, unquantified day rates, etc. We ensure you know the cost and we keep your interests as the priority, especially in the final often difficult phases pre-completion. For a £5m enterprise value, for example, we charge 9 months of work and a success fee of just £50k. Call or email David to discuss your requirements and expectations confidentially.
Don’t you have a conflict of interest acting for so many in the same industry?
No. The Governance, risk and compliance market is a large one with many hundreds of suppliers. There are also some firms we simply will not act for; and they know who they are. We do advise firms who compete with each other as this is a necessary aspect of being experts in the industry for such a long time, but never on the same issue. We never disclose details of one firm’s confidential plans with another- we’d not have been in business for 30 years if we ever did that.
The most engaging aspect of this market is that on the same core facts and data no two entrepreneurs will take the same lesson from it. That’s exactly how it should be. We do know what firms really do, not what they say they do, and can help you planning for the future to ensure your approach is genuinely different from the others and more relevant to clients.
Do you act for buyers or sellers in M&A?
Historically we have been leaders in ‘buy-side’ deal management. We built the first consolidated group in regulatory consulting. We were the first to buy into professional services automation software acting as principals for Wolters Kluwer and Thomson Reuters. We led the acquisition team in National Britannia in consolidating the safety market. We understand how listed buyers work and think; and we’ve seen the private equity approach up close too.
We’ve been so successful at this, that yes, we do get asked to take on ‘sell-side’ projects too. We have, for example, seen multi-billion dollar deals with Elsevier/WK and Practical Law/TRI and negotiated with Competition Authorities, as well as smaller deals including PerryScottNash acquired by Acoura, and EmpireHR by Law at Work.
We only take on projects in the markets we know, and we offer a fixed fee approach for buyers and sellers.
We are unique in having experience in buying and selling, content, computing and consulting businesses of all sizes but exclusively in the governance risk, compliance and legal services markets.
Do you do training?
In a sense everything we do is a form of training. The information and intelligence services are designed to show you real examples of how corporate finance issues are playing out in the market. We are often asked to run public courses, but have taken the view to not to. If we put everyone we know in the same room, there would probably be blood on the carpet.
Accordingly we do offer in-company focused Masterclasses around the three core topics in the market currently (drivers, service development, M&A). These work best in 1 hour session with 1 hour Q&A for groups of 5 or 6 senior managers.