Fusion sold John Hall’s business last year. Here is John’s account of what it is like to sell your business.
I set up John Hall Associates in 1973 as an information service to advise UK industrial and commercial oil consumers on the different facets of commercial purchasing and to provide on-going market intelligence to enable them to stay ahead of the mainstream market. In 1990 de-regulation of the UK electricity and gas markets was introduced and we extended our activities to provide commercial advice in these two sectors both directly and through a range of publications. Within two years, our clients were asking us to take over procurement negotiations for them. In 1999 we started to follow the slow liberalisation process that had been promised for the EU market and by 2005 we were becoming established within the overall EU energy market; and were certainly in the top six of the four hundred consultancies in the UK
Over the years I had received a number of approaches from prospective acquirers of my company, but nothing that had appealed to me. However, in 2006 a US company made a serious approach, following a discussion to set up a partnership with one of its subsidiary companies that provided similar service to its US clients in the same way that we did for our pan-European clients. The fit between the two organisations was excellent and by the end of 2006, discussions were well advanced. As we moved in to 2007, regulatory changes in the US caused the prospective purchaser to put all non-core activities on hold and therefore the proposed sale was halted. Towards the end of 2007, discussions were re-opened, but then we moved into the second quarter of 2008 and the period leading up to the global financial crisis. The market turmoil caused the prospective purchaser to divest itself of all non-core activities, including the consultancy division which we were planning to merge with. Once the de-merger had taken place there was a brief discussion with the now independent consultancy but the arrangement was not appealing enough for me and we ceased discussions.
In 2008, I was approached by three UK based organisations, all at around the same time. In spite of the fact that my company had never actually been put up for sale, I decided to take one approach seriously. However, as this company had made a number of approaches to me over the previous ten years, all of which resulted in failed negotiations, I decided that I should only proceed with professional advice from a specialist firm. I spoke to a friend who had successfully sold a company that competed with mine. He recommended Fusion Corporate Partners to me, the same M&A firm that had advised him.
I arranged a meeting between Mark Eisenstadt, a partner at Fusion; Neil Hart, my solicitor at Thomas Eggar and my accountant David Brownrigg of David Bowden & Company. If we were to go ahead with this sale, I wanted to ensure that I had a team in place and not to have to pass messages from one person to another. We decided that Fusion was the company we needed to run the sale process. I was assigned Paul Kelly from Fusion to act as my permanent advisor.
The process was long winded and more complicated than any of us expected. However, throughout the process Paul Kelly was available virtually 24/7 and never once faltered in his determination to keep the process on track. In terms of day-to-day negotiations and problem solving and generally keeping everyone active, Paul made this deal happen. I was fortunate to have an excellent legal, accountancy and corporate finance team on my side. Now, one year on, Paul is advising me on the earn-out portion of the deal.
There are many pitfalls to selling one’s company and I can state quite categorically that no such exercise should be considered without the support of an organisation such as Fusion Corporate Partnership.