Veber, a London-based managed services provider (MSP) founded by Tim Poultney and James Robinson in 1999, was acquired by Acora Ltd, a UK-wide Managed Service Provider. Veber’s core business, which is providing premium hosted managed services on recurring revenue contracts to approximately 50 high-value customers, has grown steadily since its inception. The company’s founders appointed Evolution Capital as advisors in 2019 after deciding to exit the business.
Veber is a successful business that has grown organically since inception and is focused on the provision of hosting services to high-end customers, who in turn provide valuable recurring, repeatable revenues. The business was an attractive proposition for potential acquirers and had been the subject of several offers. Evolution Capital was appointed by the owners to ensure that full value was achieved and maintained through the sales process to completion in the resultant sale to a qualified buyer.
Tim Poultney, Veber’s CEO said, “We appointed Evolution Capital because of their expertise in the ICT and Telecoms space. Although we had received an attractive offer at the time of our engagement we were convinced that they could improve and find us a buyer for the business on better terms than we had yet been offered. We needed to understand the true value of the business before going to market.”
A thorough business review was required to identify the areas which needed affirmative action to increase the value and make the proposition more attractive. Evolution Capital quickly identified that Veber had a highly valuable client base on relatively short contracts, and which were not always clearly defined. It was also identified that the age of the operational assets was increasing and in need of replacement. A program was put in place to review and enhance client commitment, maximise business value and compel a upper tier mid-market buyer.
The risks and potential obstacles preventing a successful sale needed identification and addressing to ensure that the right buyer could be found and a smooth sales process concluded. The on-going challenge was to initiate the improvements within the business to attract appropriate offers and proceed with the sales process whilst continuing to keep the business stable and buoyant. At the height of the global pandemic experienced and tenacious deal management and a tightly controlled process were essential to ensure progression.
Alex Gerber, Veber’s Legal Counsel said: “Evolution’s involvement was valuable on many occasions during the financial analysis and legal negotiations, helping to get the deal smoothly concluded”
Advice, preparation and planning
Evolution’s engagement with Veber commenced with a detailed review of the business and several recommendations were made. Each major client agreement was reviewed and the value-building program subsequently secured the necessary extensions in the length of customer contracts. Advice with contract terms was provided to strengthen business continuity and strategically rental revenues were given a more advantageous accounting treatment. Ultimately, Veber was repositioned as a growth business providing premium services to a highly targeted client base.
Tim Poultney continues, “The level of detail and advice that Evolution provided us with ‘presale’ were vital in helping us overcame the obstacles and any potential show-stoppers. Without their help and assistance, we would not have been able to affect the introductions to suitable buyers and we would certainly not have been unable to complete the transactions in such a timely and effective manner. The amount of time spent in the detailed preparation was money well spent and paid dividends in the end.”
Unlocking hidden value
Like many MSPs, Veber possessed hidden business value that needed to be unlocked to ensure that a successful transaction could be concluded. The detailed preparation, analysis and expertise provided by Evolution Capital enabled the vendor to find a qualified buyer on the right terms.
David Hemmings, Acora’s Head of M&A, said
”Buyers need accurate and clear details in order to fully evaluate the value and opportunity of any potential deal. Vendors that invest in strong guidance, advice and management from professionals like Gary, Stephen and the rest of the team at Evolution, means it’s much easier for both parties to identify and resolve issues during the deal process.”
A successful outcome
The overall process was beneficial to both buyers and sellers and provided an effective platform for complete transparency and efficiency. Veber was introduced to the right buyer at the right time ensuring that the transaction was concluded successfully.
Tim Poultney summarises by saying, “without the hundreds of hours spent in preparation, from the heads of agreement stage onward allowing us to overcome each obstacle, including legal issues and lengthy Due Diligence questions, our extended team could not have achieved the result we were looking for.”
David Hemmings, said “Evolution worked well with Acora throughout and provided relevant vendor support and expertise to their client during the transaction to make things happen. We would happily work with them again.”
Nigel Cook, MD of Evolution Capital said, “We were absolutely delighted with the outcome of this transaction. Following meticulous preparation we identified intrinsic value in Veber and we were thrilled to have worked in close partnership with Tim and his team to deliver an outstanding transactional outcomes for our clients”
Evolution Capital Transaction and Advisory Team:
Stephen Taylor – IT and Telecoms Transaction Specialist
Gary Smith – Lead Advisor