What is the deal?

The sale of Hofy, a global leader in IT lifecycle management for remote workers, to global HR and payroll platform Deel Inc. Hofy serves more than 700 IT and HR teams worldwide; Deel is a global HR and payroll platform, but did not have the IT capability Hofy offered. The acquisition enables Deel to offer IT services and device lifecycle management for remote workers internationally. The transaction was a 100% straight sale, but financial details of the acquisition are confidential.

How were you introduced to it?

Taylor Wessing had been advising Hofy since it was founded by Sami Bouremoum and Michael Crisp-Ginzo in March 2020. The launch coincided with the start of the pandemic, which saw demand for the services Hofy was offering really take off. Over two years, Hofy raised around £25m through three fundraising rounds. We advised on all three. The relationship lead partner introduced me when the acquisition offer came in, due to my prior relevant experience, and we got the mandate. I have extensive experience in M&A for venture-backed founder-run companies that are being sold to international acquirers, all of which were features of this transaction.

What was the process?

We were engaged in mid-April 2024 and the deal completed in mid-July 2024. Deel had made an acquisition approach to Hofy. There was no formal term sheet in circulation when we were engaged, but the two parties already had a good relationship because they had worked together – and they wanted to move fast.

Hofy is a UK business with subsidiaries and operations in the US and Amsterdam. Deel is headquartered in California and has acquired companies in various jurisdictions in recent years. It was therefore a US law and a US-style deal, which can feel quite different to a typical UK approach, particularly regarding risk allocation and disclosure.

As a remote business with employees across the world, Hofy had different incentive schemes in place to cater for its international workforce. Our incentive team therefore played a significant role to ensure a smooth sale. 

Who were the other advisers?

We were legal adviser to Hofy. Taylor Wessing also provided employment, tax and incentives, data protection and commercial legal advice. Orrick was Deel’s legal adviser. Cooley in the UK was the legal adviser to Hofy’s institutional investors. EY and Deloitte provided tax and financial advice. 

What were the challenges?

As well as the timetable, the challenges were pretty typical to large international transactions of this kind: managing the large number of diligence requests and the volume of information to be shared; considering the approach to be taken under different incentivisation plans and different tax regimes applicable to different sellers; and managing a relatively large number of shareholder and option holder interests. The strong founder-investor relationships, plus the determination and support of the company to ensure everyone was kept up to speed and could move quickly, was key to this successful transaction.

What were the lessons learned?

Even against the backdrop of a market in which transactions are generally taking a lot longer to complete, if all parties are aligned on the ultimate goal it is still possible to get deals done quickly. Key to this is good shareholder engagement and management, being focused on really important points for the client and having all parties aligned on the end goal and timetable.