While they talked over coffee, or a beer, or dinner, they heard plenty of positive news about the sector as well as the business. “Each time, we would hear that they had done what they said they were going to do. That gives you confidence in the management team and the business,” says Seb. It was the type of diligence that money can’t buy.
“It’s the holy grail: to build up a strong relationship with the management team over a prolonged period of time, before actually doing a deal,” says Seb. “If the arrival of an Information Memorandum is the first time you learn about a business, you are in competition with many others and are less likely to have an angle, differentiation or knowledge.”
When the time came for a process to be run, Equistone was the management team’s preferred party. The transaction was completed in March 2018, two years after their first contact. Several senior managers reinvested a significant proportion of their proceeds alongside Equistone. Palatine also co-invested for a minority stake.