Crafting a deal that meets the needs of all stakeholders is always possible, says Harry Knight of Corbett Keeling.
What was the deal?
The Mobeus-backed MBO of GW Global Insights (Gasworld), completed in November 2022. The deal value was not disclosed. The business was founded 20 years ago by its owners, John and Karen Raquet, and provides news, data and events for the industrial gases market, a sector worth more than $100bn globally per annum. It has also developed into the leading source of technology and policy insights for the hydrogen sector.
How were you introduced to the deal?
Our chemicals sector specialist, Matt Dixon, introduced us to Gasworld in late 2020. We did a ‘position and readiness optimisation’ (PRO) review with Matt and our media sector specialist, as the business bridged the two sectors. This gave them a full understanding of the value they could expect for the business as it was at the time and suggested strategies for increasing the value. While the business was growing well, we explained that if they developed their management team and demonstrated their ability, the company would be worth much more.
The owners took our advice on board, came back nine months later and asked us to take the business to market. It proved to be time well spent upfront – they could see the results of our advice and their work. Selling their life’s work is probably the biggest financial decision for a business owner. They need to truly trust their corporate finance adviser.
Who were the advisers?
We provided corporate finance advice and helped draft the information memorandum and prepare the dataroom. Deloitte was tax advisers to the vendors and Wallace their legal adviser. HMT carried out financial due diligence and buy-side advisory for Mobeus; Plural Strategy carried out commercial and Michelmores the legal due diligence. Trillium carried out an exit review, Grant Thornton did the tax structuring, and Sustainable Advantage provided Mobeus with ESG advice.
What was the process?
After our PRO review, Gasworld managing director Martyn Hammond really stepped up, which opened up the possibility of private equity and international buyers. We ran a full process to trade and private equity, and helped the owners evaluate the relative merits of each. We know the private equity market very well. We are also a member of Globalscope, an international M&A network across 46 countries.
In the end they went with Mobeus, who put forward a structure that benefited everyone. The value was right for the sellers and it was structured to meet their objectives. The price was obviously right for Mobeus – who could perhaps see the greatest potential in the hydrogen side of the business. Crucially, it was right for management too. A good deal is where everyone is happy. It is the job of the adviser, as architect of the transaction, to get inside the thinking of all the stakeholders. There is always a way to craft a deal that satisfies everyone.
How was the deal structured?
It was the first investment from Mobeus’s new fund and they didn’t raise third-party debt. From its perspective, it made the buy-out more deliverable. From ours, with no third-party debt provider involved, it was one less hurdle.
What were the challenges?
When we started on the deal we went through lockdowns, so events that Gasworld ran were cancelled, and it had to rebalance resources with podcasts, online events and more focus on growing the hydrogen side of the business. The management team did a phenomenal job: despite losing between a quarter and a third of revenue through lack of events, they continued to hit forecasts – which impressed Mobeus – and proved they were capable.