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The sale of Voyager at the height of the dotcom boom is sometimes dismissed as “ just lucky “. Clearly it was fortunate to have built just the right business to sell at just the right time.

The sale of 5i earlier this year is also regarded by some people with something close to disbelief. When you realise that the sale process was underway at the time that the banking system was close to meltdown ( mid 2008 to mid 2009 ) and that the bank funding for the purchaser came from RBS – probably one of the first deals that they funded in 2009 after becoming largely owned by the government, the sale begins to rake on mythical qualities !!!

Actually there is no mystery to achieving the successful sale of a company but we might look at the sale of 5i as an example of how to maximise value in the worst of all times.

It has to be said that in 5i we have a company that ticks all the “ P “ boxes. It has, for many years, been a highly profitable, cash generative business.

It has superb People starting with the management tean headed by M.D. Peter Howells ( formerly Sales Director at Voyager Networks and M.D. at Spider Networks – who Voyager bought in 2006 ) and F.D. Clive Orchard.

It has massive Potential , being positioned in the high growth Unified Communications market, working with Cisco and Microsoft. It’s influence extends globally and it is regarded by Cisco as a “ market maker “ and a facilitator in moving it’s channel toward a more solutions orientated model.

It has a Plan to achieve that Potential in a Profitable way. It has established proven Processes that were initially developed in Spider, Shiva and Voyager and then further honed in the early years of 5i’s life.

So, one of the reasons why a sale could be achieved at a time of dire economic crisis was that it was and is a very great company. The other reason is that it adopted the company sale process that I have outlined in this blogsite, which was also used in the sale of Voyager.

5i selected M & A adviser, Nortons, after discussion with key shareholders and other advisers. Nortons came out of the “ beauty parade process “ as being the most suitable M & A partner. The selection of the right M & A partner was very key.

The other key decision was that most of the sale work would be done by Peter and Clive working with Nortons whilst the other Directors concentrated on running the business, providing input where and when required. Even so, Peter and Clive had to contribute to the running of the business alongside the sale activity.

The M & A team at Nortons, as we have mentioned elsewhere, was an excellent combination of an accountant who had become an M & A adviser and a lawyer who had been involved in an Internet buy and build.

So, the main team, comprising of 2 people from Nortons and 2 from 5i, was of the very highest calibre. It was, therefore, no real surprise that the Teaser and the business Sale Proposal were a very high standard, as were the presentations and discussions with potential suitors.

It is probably becoming clear that, apart from the economic backdrop, which nobody could do anything about , everything else was exactly right – almost perfect.

Again, as discussed in the Selling a Business section here, a dynamic potential buyer list was established and maintained throughout the process. The net was cast wide initially – and this meant globally – India, China, the Middle East and North America.

In some cases middlemen, local contacts in each country, were established. In the end the buyer came from the U.k. but useful discussions were held with people from other countries. ( Actually what emerged from the global investigations was the fact that 5i’s model and it’s relationship with Cisco in the U.K. and E.M.E.A. was ground breaking and leading edge. Whilst we sometimes think that what happens in the U.S. happens here 6-12 months later, this is not always true. Often the U.K. leads the world in establishing new thinking. In many ways the rest of the world was only just becoming ready for the 5i model a year ago. Without going into detail the list of potential buyers was whittled down to a few, very suitable partners and Impera Group Plc ( now renamed 365iT Plc ) emerged as the most appropriate partner.

It is not at all surprising that 365iT is itself run by a very experienced team headed by Peter McLean ( formerly of Guardian IT ). 5i has become part of a Buy and Build strategy. 5i adds key technical specialisation to the 365iT mix. 365iT is for example a “ Virtualisation “ and “ hosting “ specialist and this goes hand in hand with 5i’s Unified Communications expertise. Overall 365iT has a business capability that covers many of the fastest growing areas of ICT. Hence the final result of the sale process was to find a partner that was an excellent strategic fit. 365iT Plc will be a company to watch as we approach 2010.


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