Lawrence Stephens’ Corporate and Commercial team acted for the selling shareholders of First 4 Safety Limited on the sale of the company to Amtivo Group, in a deal which was completed on 14 March.

Founded in 2005, First 4 Safety Limited is a leading provider of online health and safety training courses, supplying IOSH approved training to workplaces across the UK. Their acquisition by Amtivo, providers of accredited certification, training and technology, represents the group’s move to grow and expand their existing portfolio.

The team was led by James Lyons, Director in the Corporate and Commercial department at Lawrence Stephens, who worked alongside the team from First 4 Safety and their advisers Moore Kingston Smith to successfully negotiate the sale of the company on behalf of its shareholders.

James Lyons commented: “It was a pleasure to work alongside First 4 Safety on this deal, and we were delighted to negotiate the sale swiftly and efficiently. Acting on behalf of shareholders Tom Hoey and John Pillinger, we managed to navigate the various complexities and ensure that the deal was a success for both First 4 Safety and Amtivo.”

Tom Hoey commented: “James and the team at Lawrence Stephens provided world-class advice throughout this process, and their hard work and dedication led to a successful and efficient sale – their advice was invaluable in completing this deal.”

Director James Lyons examines the Dignity PLC takeover deal, and discusses the implications of this for the mergers and acquisitions market and the power of shareholders.

James’ article was published in Law360, 9 February 2023, and can be found here.

Before many bankers’ New Year’s Eve hangovers had even cleared, UK plc was given a rude awakening by the first British takeover approach of 2023. A consortium led by insurance tycoon Sir Peter Wood made an offer for funeral provider Dignity, which was immediately recommended to shareholders by the company’s management, bringing to a swift end Dignity’s near-20-year listing on London’s stock exchange.

While early investors were well-rewarded by the meteoric rise in Dignity’s share price, recent years have been less kind to holders of the stock, with the company’s value at the time of Wood’s approach a mere fifth of its 2016 peak. Steeply rising costs had hit the company hard of late, and the markets had been even quicker to punish the share price on the way down as they had been to reward it on the way up.

With no imminent change in market sentiment in sight, not least after long-running, bruising battles with activist investors agitating for change, management clearly saw little runway in maintaining its stock market listing. Wood and his backers offered a way for the board to attempt to turn the ship around and return to long-term growth and profitability, especially given all of the funds earmarked for investment by the consortium.

Dignity’s public-to-private path is one well-trodden down the years, and the companies opting to change course so drastically are not only those down on their luck. While Dignity had been on a downward spiral for over half a decade, plenty of firms riding high also prefer to go private as a way to maximise company growth and shareholder returns.

While there is a clear benefit to firms seeking investment to do so via IPO (Initial Public Offering) and listing on the stock exchange, over time there can often seem ever-decreasing benefit to remaining a public company. The vagaries of the stock market, the capricious nature of investors, and general economic volatility can all weigh heavily on a company’s share price, piling pressure on management to deliver short-term results ahead of concentrating on longer-term goals, simply to buoy the stock price.

Such measures may be entirely at odds with managements’ view of the company’s best interests in the longer term, and result in counter-productive outcomes for staff and shareholders alike. Yet many boards nonetheless end up bowing to the demands of vociferous investors, whose voices nowadays are amplified even further by instant communication and ubiquitous social media platforms to air their criticism.

Such fear of rebuke, especially for boards of mid-to-small cap companies, has inverted reality to the point that they themselves believe that the share price dictates a company’s fortunes rather than the other way around. Share prices are by definition a reflection of investors’ attitude to a particular stock, rather than a guide to how well the company is performing or will perform in the future. Management should always ask themselves what decisions they would make if their company was private and thus there was no share price to worry about, rather than feel forced to merely react to others’ reactions to the current stock value.

If the answer to the above is that they feel compelled to make certain decisions in the short term to appease shareholders that may go against their better judgment for the company’s longer term future, then there is clearly scope for considering whether a public listing is worth maintaining at all. What may have once seemed appealing as a means to access institutional investment, create share liquidity and garner prestige by having a stock market presence at the start of the company’s journey may at a later stage become the very albatross round its neck that holds it back from future development and growth.

As well as the time and money spent debating and placating disgruntled investors in times of distress, management of public companies have to shoulder the day-to-day burden of compliance with the demands of market regulation and listing rules in order to maintain their firm’s listing. Having to report results on a quarterly or half-yearly basis and constantly update the market on any significant new developments in the business is a costly exercise, and also has the effect of exposing the company to regular parsing, analysis and micro-management by exactly the type of aforementioned investors who may forego long-term company growth in favour of myopic, short-term share price flips.

Freedom from such enforced transparency can be a boon for many companies, allowing them to carry out corporate restructuring and M+A activity far from the madding crowd of investors, analysts and commentators alike. Management can thus focus on a longer-term strategic outlook, including staff retention and rewards.

However, whilst there are benefits to privacy there are also inherent potential pitfalls. The removal of market compliance and reporting requirements allows more scope for any managerial misdeeds to go unchecked, and thus the lack of public scrutiny needs to be replaced by solid corporate governance and strong reliance on watertight auditors and robust legal representation.

At the same time, if the only way for a public company to secure a private takeover is to become saddled with significant debt to help service the financing of the transaction, as is the case in many such buyouts, caution must be applied when judging how much extra financial burden the company is sufficiently equipped to take on. Leveraged buyouts of public companies have often proved a recipe for disaster in recent years, especially in cases where new owners are seen as using the purchased company as either a means to strip assets or siphon cash from the business, at the expense of long-term growth and success.

As such, custodians of a company have a keen duty to all stakeholders, not least the workforce, to ensure that any potential suitors are genuinely well-intentioned, rather than a wolf in sheep’s clothing.

2023 finds UK plc still reeling from the twin economic blows of the pandemic and the war in Ukraine, both of which have had major consequences across all sectors of the stock market, and which have left countless firms teetering on the brink of collapse. The uncertainty which abounds provides clement conditions for pairing up between private equity and public entities, and M+A activity is likely to steadily increase over the year ahead, as initially evidenced by the Dignity takeover so early in the first quarter. Given the parlous state of the global economy, it is understandable that many boards feel panicked into action to restore shareholder value, but it is important that they avoid rash, rushed decisions for their companies’ futures. Often, the private arena offers a calmer, more rational setting for strategizing for the long-term than the pressure cooker environment of day-to-day traded markets, and as such should be seen as a viable option for many companies who previously may not have given such relocation a second thought.

Director James Lyons comments on Immotion Group’s £25 million to offload its location-based entertainment business, and the impact this has on shareholder value.

James’ comments were published in Law360, 02 February 2023, and can be read here.

“This is a good example of management seeking to balance the creation of shareholder value in both the short term and the long term, and of the importance of being proactive and nimble in the current economic climate to meet the demands of the business and its shareholders.

“The sale of the LBE business enables Immotion to deliver an immediate return to shareholders in excess of the current share price, whilst the company’s new sole focus on the HBE business together with the further capital at its disposal helps it to solidify the opportunity to deliver enhanced long term shareholder value in a growing sector.”

Steven Bernstein, Senior Director in the Corporate and Commercial department and co-founder of Lawrence Stephens, argues that some companies fare best when owned privately, in Law360.

Steven’s comments were published in Law360, 20 January 2023.

Discussing Seraphine Group PLC’s £15.3M Takeover by Mayfair Equity Partners LLP, Steven commented: “From my perspective, it’s an interesting example that maybe not every business is well suited to be on the public market…

“And then there are some businesses that are just better owned privately, because there’s just a greater degree of flexibility, and you can make quicker decisions without the scrutiny that comes from being in a public space.”

Lawrence Stephens’ Corporate team acted for The Agility Group in connection with the sale of Agility Risk and Compliance Limited to Opus Safety Limited, in a deal which was completed on the 17 January 2023.

Agility Risk and Compliance Limited, subsidiary of The Agility Group, provide tailored solutions to mitigate risk and improve compliance in Health and Safety, HR, Training and Occupational Health. Opus Safety Limited will expand its capabilities via the acquisition. Meanwhile, The Agility Group will concentrate on scaling up its core business in vehicle funding and fleet management solutions.

The deal was led by Senior Director, Jeff Rubenstein with assistance from Associate, Aashay Knights and Solicitor, Isobel Moran. The team worked collaboratively with the management team at The Agility Group in the sale of its non-core business, to allow them to focus on developing and expanding its main business, Agility Fleet.

Jeff Rubenstein, Senior Director, Corporate and Commercial comments on the completion: “It has been an absolute pleasure to act for The Agility Group on the sale of this non-core business. Keith Townsend and his team’s willingness and responsiveness made it possible for our team to act swiftly and complete the sale without delay. We’re delighted to see The Agility Group streamline resources and focus on the continued growth of its core business, and we look forward to working with them again”.

Keith Townsend, Chairman and CEO of Agility Group comments on the deal: “Having met Jeff on a number of occasions, I didn’t hesitate when he came recommended to act on this deal. The Lawrence Stephens team were always on call and any concerns were put to bed by Jeff who demonstrated a great deal of commerciality as he put my mind at rest on a number of occasions. Jeff and his team, including Aash and Izzy ensured a fair and balanced deal was struck, and I couldn’t have asked for more.

With the sale out of the way, the team at Agility Group are keen to re-focus our efforts on Agility Fleet, to maintain our position in the market as one of  the leading independent providers of vehicle funding and fleet management solutions in the UK”.

Lawrence Stephens’ Corporate and Commercial team has completed another significant acquisition for one of the portfolio companies that make up the Ansor Group, with the acquisition of Cunnington Clark by Efficient Building Solutions.

The amalgamated team will become QODA’s (a subsidiary of Efficient Building Solutions) new Peterborough office, providing mechanical, electrical, and public health design services. The integration of the Cunnington Clark team will allow for collaboration across Cambridge, London, and Norwich; and ultimately strengthen the QODA offering in the Eastern region.

The Lawrence Stephens team, led by Senior Associate Katherine Zangana, with assistance from trainee solicitor Isobel Moran, acted for the Ansor portfolio company, Efficient Building Solutions in this transaction.

Katherine Zangana, Senior Associate in the Corporate and Commercial team comments on the deal: “We have a strategic process in place when it comes to getting acquisitions across the line for Ansor Group. The acquisition of Cunnington Clark was no exception, as we turned the deal around quickly and seamlessly. We are very pleased to act on behalf of Ansor’s continued expansion”. 

Lawrence Stephens’ Corporate team has completed two further acquisitions for Ansor Group’s portfolio company, Amalgamated Laboratory Solutions (ALS), with the acquisition of its first London laboratory, Ken Poland Dental Studio, and that of Kent-based, Veus Dental Laboratory.

Ken Poland Dental Studio is situated in the heart of London’s West End in the Harley Street area and the acquisition is a milestone for ALS as it focuses on the Capital’s talent and innovation. Likewise, the acquisition of Veus Dental Laboratory lends itself to Ansor’s quest for talent and innovation as the laboratory, led by Dr Manmit Matharu, was created to bridge the gap between Dentist and Technician.

The team led by Senior Director, Steven Bernstein with assistance from Senior Associate, Katherine Zangana acted on behalf of ALS on both deals, making swift progress in every stage towards completion. The result is a significant contribution to Ansor’s overall expansion plan in the dental solutions space.

Steven Bernstein, Senior Director in the Corporate and Commercial team comments on the deals: “These completions came during a wave of multiple Ansor acquisitions that we acted on in Q2, but they hold particular significance for the growing business, with ALS acquiring its first laboratory in London, as well as the first laboratory that is run and owned by a dentist. We were delighted to have completed these transactions and look forward to Ansor continuing to expand its portfolio”.

Lawrence Stephens’ Corporate & Commercial department has completed another two major acquisitions for two of the portfolio companies that make up the Ansor Group with the acquisition of Tennals Fire & Security by Compliance Group, and Procure4 by 4C Procurement.

Each are significant acquisitions and will broaden the range of services provided by the Ansor Group through its portfolio companies. Tennals Fire and Security is one of the largest fire safety services companies in the UK and the acquisition has broadly expanded Compliance Group’s range of protection services. The rapid growth of 4C Procurement is enhanced by its recent acquisition of the international supply chain management consultancy, Procure4.

The Lawrence Stephens team, led by Senior Director, Steven Bernstein and assisted by Senior Associate Katherine Zangana, acted for the Ansor portfolio companies in these acquisitions.

Steven Bernstein, Senior Director at Lawrence Stephens comments on the deals: “We have completed a significant number of acquisitions for Ansor Group in the last two years, and we still prioritise every single one. We are just as thrilled to act for the portfolio companies that make up the Ansor Group on the 50^th purchase as we were when the first acquisition came in, and we share the Group’s excitement when it comes to its growth plans”.