Preparing for Sale

August 17, 2023


3 min read

Introduction to the shareholders of Unicomm

Gary Roberts and Simon Drew established Unicomm in 2009, following careers in the IT and Telco space. Initially, the move towards founding their own business was made in order to build relationships with manufacturers. The pair were approached by an IT company to set up a new business, and formed what was known as iHotDesk. After 2 years, one of the directors left and Unicomm was subsequently formed.

"It had always been an ambition for the us to start, own, manage, and sell a business. It was a good ambition to fulfill right the way through to the end of the sale. It was a good journey, a lot off ups and downs along the way, but all worthwhile”.

Simon Drew, Unicomm

Highlights from business ownership?

SD: We learnt a lot from the process of owning a business. We had the ups and downs, it was good fun, but also stressful – when it’s just two of your running the business and covering so many aspects of the business – but we managed.

GR: I think it gets to a level where everything is running along smoothly, and then something causes a complete U-turn or a change of direction. Whether that’s an industry shift, for example going from one premise to Hosted, which we adapted to really easily,because we didn’t have any sales force. But it’s constantly changing and constantly re-evolving.

GR: We're seeing that in the industry now, that there’s another change coming, and it's always challenging to do that and trying to get things back up to where you are. But it seemed a constant sort of roller-coaster of a journey and Covid was a classic example of how quickly it can change.

What was the target customer for Unicomm?

SD: We had no particular vertical. We just concentrated on companies that were sort of in and around London.

GR: Both of our experiences were dealing with medium size businesses rather than small businesses, but some larger businesses. So, we just concentrated on what we were good at.

GR: It goes back to the early days, where we got a deal wherever there's a deal to be had. So, because when you're building a business from nothing, it was like anywhere you can get. A lot of our business came from referrals. So, people would introduce us to people and say these guys are looking for something. So, it was really following where the referrals were taking us.

When and why did you first consider an exit?

SD: Covid changed the market a hell of a lot. 2025 was our initial idea of when we would have sold if COVID had not have happened.

After COVID, the market changed massively. More people were just doing Teams meetings and it took the enjoyment out of what we enjoyed of the job - of going and seeing customers and meeting customers face to face.

So, because of that reason and we were getting calls all the time about are we looking to sell, we decided to speak to Evolution Capital and really understand the process of what would have to go through for if we did sell the business and what sort of valuation we would get.

GR: We were also getting approached by vendors and consultants and say, you know, now was the right time. The multiples are high. So, curiosity really drove us something. And there were other people were talking to and it came to the point of, yeah,that's, that's its property. I got a decent valuation and then make a decision based on that.

Did you have any goals or aspirations before entering into the sales process?

GR: We knew what we would like,but not what it was going to get. This was part of why we wanted to engage with advisors such as Evolution Capital, to get that experience of what the multiple could look like and what the valuation would be at that moment in time. It was sort of a roundabout way, we thought it would be based on what we knew with the industry or what we'd heard, but you never know until you get a proper team who knows about valuations in the sector, giving you that valuation.

Why did you engage with Evolution Capital in 2019?

GR: We were just understanding the process. I mean, we actually went through the process of buying a mobile business. And in that process, we understood how important it was to engage with professionals to help you through that. That business didn't go through because due diligence showed that it wasn't worth the valuation put to it.

GR: So, it was in that process,I think we had learned that we need to get people to understand the whole process, that you've got to go through it, be or seem like an insurance policy to make sure that what you set out to achieve, you do achieve.

Did you engage with any other advisors before selecting Evolution Capital to guide you through the exit process?

GR: We just felt that Evolution Capital were a better fit for us because of the level of detail and the granularity you go to, to give us the reassurance we were going to get the right sort of representation.

GR: There was another guy that was a private sort of individual whose presentation was very similar to yours,may have had some involvement in the past, but we just felt the strength and the depth of what you provide during the due diligence, that will everything you involved with the transaction made us feel much more comfortable.

Did you specifically seek an advisor who would guide you from start to finish?

GR: Yes, very much so. I mean, we have always been aware that some companies wouldn't see you from the start to the finish and yes, it was very important for us to have that.

SD: As you said, you know, you have been with us from start to finish in your work, so that worked well for us, right?

Did our team understand your business to a granular level? What did you learn through this part of the process?

GR: Yes, that is what I was hoping for.

Double entry bookkeeping is a complete mystery to me, even though I've done the accounts. So, when it came down to really micro analysing the last three years transactions, whilst it was refreshing to know that you were going to that much detail, there's also a tremendous amount of work to try to map up to what you were expecting from what we had.

So quite a lot of work trying to unravel all the revenue streams. But it was good information to know if you'redoing it again, which we will be, to make sure we get all of that lined up so that it's much easier to produce what you need to go through an exit and understand the business.

How did you find working with Sam through the process?

SD: In terms of working with Sam, he worked very closely with us. He asked for a lot of information from us,which was needed. He stayed with us from start to finish, fought our corner,and achieved what we wanted to. So, we can’t argue with that!

GR: It was very good, I mean, it took a year to go through, so it felt like he was part of the team. He understands that sector, and his ‘thing’ is finances, money, and numbers.

The level of detail he went into and understood, I mean, we had a unique customer ID number, and he knew which customer it was and was not forever looking at the mapping.

He really, really knew the business and got to know the business, understand the business on a much deeper level than I thought anybody would. And I think experience it would have been a case of No one would have gone to that level of understanding and detail and looking at every single bit of value that the business has to offer - If there is anything that might jeopardise that, knowing how to manage it and resolve it. I think it is just like having someone stay for the process, and I felt very comfortable having him at the helm, taking us through that process.

It was absolutely invaluable to us, the expectation you hear in the market of what multiples are being banded around, and I think you've got to take that as a pinch of salt because you always hear of success stories and people selling for ten times etc.

Did you find that buyers and offers were well qualified and vetted by the EC team?

SD: The reality of it is, you are only worth whatever anyone is prepared to pay for you. So, we're both pragmatic and we've both realized that. And so, you know, we were we were happy with what we got. Yeah, I think the outcome was the best outcome we could expect at that moment in time. And that is to say we're realists.

GR: Once, you know, we know that it is only worth someone's going to pay for it. So whatever value we have in our head and whatever value people might speculate for, it's only going to get what it's worth from the buyer that's prepared to pay for it. And I think in the grand scheme of things, I think we did very well.

How did you find due diligence with a Tier 1 Buyer?

GR: I felt like we've done it three times a little bit because we did the pre-sales due diligence where we'd answered a lot of financial questions and drove down on a lot of information.

GR: Then we got the sale process and then get this multitude of other stuff coming through and therefore all the paperwork and how they want things done. So then we probably did really do what you've already done, but into their format and the process. So then you go over the legal side of stuff which you haven't even touched on it to that point which was in there.

GR: And their view was like he was buying £1,000,000,000 business rather than what they were buying because it was just so much due diligence and legal requirements and warranties. And I mean, the legal guys said they had never seen a deal. So much information meeting. So yeah, so that was, that was the whole process. And then once that happened,

GR: So they were asking similar sort of questions or the same old questions. I felt like we went through it three times and it was necessary. I would do the same if I were buying a business. we did do the same when we found out the business, we were looking to acquire wasn't worth what we were looking to pay for it. So, it was a good process to do.

What would you do differently or recommend to shareholders entering into the exit process?

GR: I think because we all saw it as a straightforward, easy transaction, which it tended to be anything but and we still had no staff and no premises. It wasn't complicated by anything from our side of things, so now thinking about what would be changed and what we would do differently, I think you guys did a great job. I think, you understand the process, we didn't know the process so, being guided through it with you [Fraser], Sam and Nigel which was really helpful from my point of view.

To shareholders going into a process, I’d probably not set the expectations that it should be a quick transaction and you know, it will be all it will be, but it could be 18 months,could be a year, but if anything, less, it’s a bonus.

Would you recommend Evolution Capital to other Shareholders?

SD: Yes. Very much so.

GR: We both wanted to experience the process of selling the business and I would say that it was a lot harder than what I expected it to be, especially the fact that we were running a small business and it was just the two of us. The level of detail that you went into was necessary.

I think one of the key things for me, for both of us, really, was that we'd heard horror stories about how a great price can be agreed at the beginning and when it comes to the final payments, price is chipped away and chipped away. So, what you agree and what you get can be pulled apart. And we wanted to protect against that. And as I said we wanted an insurance policy, which is what you were to us.

And you were absolutely true to your word. You did that and all the work you did, from when you pitched us the valuation, to Christmas Eve heads of terms came through to the valuation we got on Christmas Eve to what we got on the 22nd of June remained rock solid and you fought hard and you persistently to keep that valuation.

And that to me was the biggest reason we came to you guys. We believe you would do that for us and you absolutely did. So, thank you.

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