Ian Barton of Quantuma
Ian Barton, managing director of Quantuma, explains the £18m MBO of facilities management business Pareto FM
What’s the deal?
The £18m NVM-backed MBO of facilities management business Pareto FM, where we led the sale mandate on behalf of the founders. The buy-out completed in March 2021 and involved a £5m debt package from ThinCats. The deal involved an exit for two of the founder shareholders and the remainder of the money raised is to be invested in technology to support the firm’s growth. This growth will largely be organic, but it will no doubt also take advantage of opportunities to acquire new clients as a result of the pandemic.
Pareto FM is based in Oxfordshire and has been led by founder Andrew Hulbert since 2014. The focus has been on tech-enabled, customer-centric solutions, so the business has really flown during the various lockdowns. It has secured many high-profile contracts with global technology, media and software firms.
What attracted NVM?
David Rolfe and Peter Hodson of NVM Private Equity, who led the investment, have joined the board. NVM has come in to support Hulbert and the management team and take the business to the next level. Pareto has some interesting clients, such as Facebook and Paddy Power, and others overseas.
The company also sets itself apart on people issues and among the LGBT community. It‘s well known within its industry for looking after its people. Hulbert is one of the best MDs I’ve met – he’s an impressive individual and manager.
It was the perfect process for him – there was lots of interest to enable him to choose the route he and his fellow shareholders wanted to go down. Some of the factors in that decision were numbers-related, but a lot were about people and how Hulbert felt it would work going forward. The business has many second-tier managers, and finance director Bill Tsang, who joined in 2017, was instrumental in building operations with Hulbert – they’re a double act.
What were the timescales?
A lawyer who knew the company introduced me to the three founders, who owned one third each. Andrew stayed on as MD and shareholder, but co-founders Charlie Sinton and Clive Granger sold their stakes. It turned out that Sinton and I were at school together – a serendipitous connection.
We were appointed in January 2020, worked on the information memorandum (IM) and went to market. The three founder shareholders aimed to go to market around Easter and we were on schedule. Then, of course, the whole thing went into abeyance for months. We picked it up at the back end of last summer and went back out to market in September. Despite the disruption, it was a relatively smooth deal. NVM did what it said it would do, including delivering a banking package.
Who were the advisers?
There were lots of local Thames Valley advisers. The Quantuma team – myself, Fardeen Nariman and Reuben Taylor – acted as lead adviser to the shareholders of Pareto. We developed the IM, secured NVM’s investment and structured and delivered the deal for all the shareholders alongside Penningtons as legal advisers. Crowe carried out the financial due diligence for NVM; Armstrong market and commercial; and Continuum, management. Shoosmiths provided NVM with legal advice, and Sooner debt advisory advice.
What were the challenges?
The lockdown in the final months of the process made some aspects of commercial diligence and access to people much more challenging. You can always find a reason not to do a deal, but working through adversity creates a positive feeling at the end. Pareto is an excellent business, so all sides were proactive and sensible to get the deal done.
The CV
Ian Barton co-leads Quantuma’s corporate finance team, with Mark Lucas. He covers Thames Valley and the south of England. He joined the firm in 2018. He had previously led the corporate finance team in the South East at Deloitte, based in its Reading office. He was with Deloitte for 20 years, having started at the firm in 1992 in Manchester, where he trained as an ACA, and made partner in 2004.
Recent deals
• Disposal of Compliancy Services for an undisclosed sum in March 2021, in an Ethos Partners-backed MBO
• LDC-backed buy-out of Phoenix Datacom in February 2021
• Disposal of design social media business Dezeen to JP Politiken Hus in Denmark in March 2021