Client case study
Calyx Managed Services Limited is a Manchester headquartered ICT support business, with the ability to act as a single, independent source for IT support, IT infrastructure and converged communications solutions to a large number of customers.
Calyx reported revenue and normalised EBITDA of £22m and £0.4m respectively in the year to 31st December 2014.
The Company originally formed one half of the Calyx Group, which Better Capital acquired from administration in 2010. Following the purchase the Calyx Group was split into two distinct businesses,
Calyx and M-Hance Group. Calyx reached underlying operating profitability for the first time in 2014, leaving it well placed to enter into a disposal process in a rapidly consolidating sector.
Rickitt Mitchell was appointed by Better Capital to lead and run a competitive sale process. In conjunction, a plan to restructure the business organically was devised, should the offers received fail to meet Better Capital’s expectations.
- To maximise value for our client via a competitive auction process.
- To defend any attempts to “price-chip” or change the terms of the deal that would have an adverse impact for our client.
- To co-ordinate the overall transaction and act as an interface with a variety of interested parties and their advisers.
- To complete the transaction in a tight timeframe.
'Brian and Kaine provided instrumental advice throughout the sale process and delivered a result above that expected. Their pragmatic advice was well received by both myself and the management team and they were a pleasure to work with. On behalf of the Better Capital and Calyx teams, thank you both.’Ben Newton, Better Capital
Within 16 weeks of project commencement Rickitt Mitchell successfully advised Better Capital on the £9m sale of their business, Calyx Managed Services, to MXC Capital, a specialist investment bank focused on the technology sector. Key areas where we added value include:
- The rapid completion of a detailed and comprehensive information memorandum, highlighting key strategic benefits an acquirer would gain from the acquisition.
- The positive presentation of the business and strong negotiation through a competitive auction process helped secure a 22.5x EBITDA multiple, with the shareholders realising 100% cash out.
- The maintenance of pricing tension throughout the process to ensure that the original offer price was fully delivered on completion.
- The use of a “locked box” deal structure and our support and management of the due diligence process ensured a fast process with no price renegotiation.
- Working closely with both Better Capital and the Calyx management team throughout the process, providing support and guidance through the complexities of a transaction of this nature.
- The co-ordination of a large team of advisers, acting as the interface with the acquirer, vendor and all related parties.
- Extensive process preparation, a competitive auction process involving a large number of interested parties, due diligence and ultimate deal delivery was all successfully navigated within a 16 week timeframe.
- Winner of Insider Deal of the Year 2015 (Sub £10m).
The £9m value achieved was some £4.1m above the most recent fund valuation of Calyx in 2014, significantly exceeding the expectations of Better Capital.
Despite a highly competitive process with multiple offer stages, Rickitt Mitchell delivered the deal within 16 weeks from preparation stage to completion. This enabled Better Capital to fully cash out, at a value significantly in excess of their expectations in a timely fashion.
22.5x EBITDA Multiple
80% Price Uplift
£4.1m Above Recent Fund Valuation
16 Weeks Rapid Deal Delivery