Bain & Company and EY advise Advent on Williams Lea Tag deal

12 September 2017 Consultancy.uk

Advent International has acquired Williams Lea Tag, a global professional services player specialising in marketing supply chain services. The US-based private equity firm was advised by Rothschild, Weil, Gotshal & Manges, Bain & Company and EY.

Advent International, one of the largest and most experienced global private equity (PE) investors, announced that it has agreed to acquire Williams Lea Tag, a provider of marketing and communications services, from Deutsche Post DHL Group.

Founded in 1984, Advent has invested in over 325 PE transactions in 41 countries, while as of March 31 2017, it had $37 billion in assets under management – in a market worth a total of $2,500 billion. Financial terms of the transaction, which see the investors obtain control of Williams Lea Tag, were undisclosed. The investment in Williams Lea Tag is subject to customary regulatory approvals.

Advent - Williams Lea Tag deal

Since its foundation in 1820 as a financial printing business, Williams Lea Tag has expanded into a global provider of marketing and communications supply chain services. The organisation also specialises in delivering integrated marketing and communications solutions for some of the largest and most recognised brands across the world. The company provides a broad range of marketing solutions, such as creative production and sourcing services alongside business process outsourcing services, including document workflow process capabilities and the production of personalised customer communications. Headquartered in London, the company has a presence in 195 cities across 40 countries.

Advent – which has a strong track-record in carving out businesses from major corporations and assisting them with their transition to independence – and former owner of Williams Lea Tag, the Deutsche Post DHL Group, have agreed to work in partnership to execute the separation in a way that will ensure continuity and quality of service to all customers of Williams Lea Tag. Private equity has been regularly involved in such ventures into independence recently, as exemplified by consulting firm Capco. Earlier in the year, a fund managed by Clayton, Dubilier & Rice (CD&R) acquired a 60% interest in Capco, while previous owner FIS retained a 40% equity interest, enabling the firm to return to independence.

Rothschild, Weil, Gotshal & Manges, Bain & Company and EY

Andy Dawson, a Managing Director at Advent International, said, “We see great further growth potential in Williams Lea Tag on a global scale. Advent will support the company through targeted investment in people, technology and systems and to strengthen its customer proposition and help its clients to realize the true potential of their brands. Advent’s expertise in executing complex carve-outs combined with our deep sector experience will ensure Williams Lea Tag’s transition to an independent company is smooth and will put it on a solid foundation from which it can grow and prosper.”

During the deal process, Advent International was advised by investment bank Rothschild, law firm Weil, Gotshal & Manges, and consulting industry players Bain & Company and EY.

Profiles

More news on

×

8 tips for successfully buying or selling a distressed business

18 April 2019 Consultancy.uk

Embarking on the sale of a business is one of the most challenging experiences a management team can undertake. Even serial dealmakers acknowledge that the transaction process can be gruelling, exposing management to a level of scrutiny and challenge through due diligence that can be distinctly uncomfortable.

So, to embark on a sale process when a business is in distress is twice as challenging. While management is urgently trying to keep the business afloat, they are simultaneously required to prepare it for scrutiny by potential acquirers. Tim Wainwright, an experienced Transactions Partner with Eight Advisory, says that this dual requirement means sellers of distressed businesses must focus on presenting their business in a way that supports buyers in identifying value, whilst simultaneously being open about the causes of distress. 

According to Wainwright, sellers of distressed businesses should focus on eight key aspects to ensure they are as well prepared as possible:

  • Cash: In a distressed situation cash truly is king. Accurate forecasting and day-by-day cash balances are often required to ensure any buyer is confident that scarce cash reserves are under proper control. 
  • Equity story and turnaround plan: Any buyer is going to want to understand the proposed turnaround strategy: how is the business going to enact its recovery and what value can be created that means the distressed business is worth saving? Clear presentation of this strategy is essential.
  • The business model: Clear demonstration of how the business model generates cash is required, with analysis that shows how financial performance will respond to key changes – whether these are positive improvements (e.g., increases in revenue) or emerging risks that further damage the business.  Demonstrating the business is resilient enough to cope with these changes can go a long way to assuring investors there is a viable future.
  • Management team: As outlined above, this is a challenging process. The management team are in it together and need to be consistent in presenting the turnaround. Above all, the team needs to be open about the underlying causes that resulted in the distressed situation arising.  A defensive management team who fail to acknowledge root causes of distress are unlikely to resolve the situation.

8 tips for successfully buying or selling a distressed business

  • Financing: More than in any traditional transaction, distressed businesses need to understand the impact on working capital. The distressed situation frequently results in costs rising as credit insurance becomes more difficult to obtain or as customers and suppliers reduce credit. Understanding how these unwind will be important to the potential investors.
  • Employees: Any restructuring programme can be difficult for employees. Maintaining open communications and respecting the need for consultation is the basic requirement. In successful turnarounds, employees are often deeply engaged in designing and developing solutions. Demonstrating a supportive, flexible employee base can often support the sale process.
  • Structuring: Understanding how to structure the business for the proposed acquisition can add significant value. Where possible, asset sales may be preferred, enabling buyers to move forward with limited liabilities. However, impacts on customers, employees and other stakeholders need to be considered.
  • Off balance sheet assets: In the course of selling a distressed business, additional attention is often given to communicating the value of items that may not be fully valued in the financial statements. Brands, intellectual property and historic tax losses are all examples of items that may be of significant value to a purchaser. Highlighting these aspects can make an acquisition more appealing.

“These eight focus areas can help to sell a distressed business and are important in reaching a successful outcome, but it should be noted that it will remain a challenging process,” Wainwright explains. 

With recent studies indicating that the valuation of distressed business is trending north. With increased appetite from buyers who are accustomed to taking on these situations, it is likely that more distressed deals will be seen in the coming months. “Preparing management teams as best as possible for delivering these will be key to ensuring these businesses can pass on to new owners who can hopefully drive the restructuring required to see these succeed,” Wainwright added.