LD&A Jupiter advises on sale of FinTech firm XXImo to Sodexo

29 March 2016 Consultancy.uk

French multinational Sodexo has acquired XXImo, a Netherlands based FinTech startup. The deal – financial terms have not been disclosed – was advised on by corporate finance firm LD&A Jupiter. 

With 380,000 employees in over 80 countries, Sodexo is one of the largest food services and facilities management corporations of the globe.

As part of the French listed multinational’s expansion strategy, the company recently completed the purchase of XXImo. Founded in 2011, the Netherlands based startup provides a digital platform which helps users manage a wide range of their business travel & expenses. The so-called XXImo mobility cards support multi modular expenses, spanning fuelling, charging, car and bike sharing, toll and parking, as well as public transport and taxi services (including Uber). The platform allows organisations and users to digitalise the whole expense process, from transaction, authorisation and cost allocation to direct processing in the accounts. According to XXImo, the company has 65 cards in use in the Netherlands, while it also boasts a rapidly growing user base in Belgium.

With the capital investment by Sodexo, XXImo can further advance its digital platform, expand its commercial network and fund several innovations pinpointed to bolster its product portfolio. As part of the deal, Sodexo has committed to support an accelerated international rollout of XXImo’s offerings, with the German market earmarked as the first stop. Behind the scenes strategic plans are already being drafted for further pan-European roll-outs.

XXImo

XXImo’s roughly 30 employees will be integrated into Sodexo’s Benefits and Rewards division, and its propositions will be added as a bolt-on to the buyer’s broader suite of mobility services. In terms of management structure the FinTech firm will retain its make-up: founders Patrick Bunnik (CEO) and Lex Broekhuizen (CFO) will hold their position – both have signed an agreement that commits them to the firm for a minimum of five years. The XXImo headquarters will remain in Den Bosch, although a search has been launched for larger premises.

During the acquisition process, XXImo was advised by LD&A Jupiter, a corporate finance firm that specialises in transactions in the Technology and Digital segments. Globally the network has offices in Munich, Paris, London, Amsterdam, New York, Berlin and Los Angeles – the XXImo deal was assisted by the Dutch team, who served as the exclusive advisor to the shareholders and founders of XXImo. “We are delighted to have worked for a disruptive company like XXImo enabling the company to further grow under the wings of Sodexo”, comments Frank Verbeek Managing Partner of LD&A Jupiter in the Netherlands.

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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.