Davidson Webber LLP has acted for the management team in the MBO of the Roterham based document tracking and storage business from Scomagg Limited for an undisclosed sum.
Walker Morris of Leeds acted for Scomagg and the McKenzie Partnership of Harrogate provided advice and assistance to the MBO team on funding and finance raising issues.
Under the ownership of the MBO team (Brian Morgan, Paul Leary and Simon Wade formerly employed by Scomagg Limited) the acquired business will be traded under the new name of Clarity Information Solutions. The MBO team will also shortly be strengthened by the arrival of David Broughton who will join Clarity Information Solutions Limited as non executive chairman when his current position as director of Scomagg Limited comes to an end next month. TheMBO team hope that organic growth and strategic alliances will increase turnover from £1.2M to £3M within the next three years.
Clarity Information Solutions Limited supplies computer systems and programs which track and store electronic documents and images of paper documents and provides versioning, metadata, security as well as indexing and retrieval capabilities and web content management system design and implementation services. Its client base includes 10 polices forces, 10 fire and rescue services, four local authorities, the Scottish Parliament, the DTI and other public authorities.
Brian Morgan, co-director at Clarity Information Solutions who lead the buy out, said: “The management buy-out was a big project for us, and we were delighted with the effort and focus provided by Davidson Webber – we felt special in their eyes. Our deal was delivered within four weeks, and within budget.”
Neil Large corporate partner at Davidson Webber LLP said “we had to move quick on this one once heads of terms were signed. The MBO team had four weeks from signing the heads to carry out due diligence, sort out third party funding and negotiate and complete the legal documents. The seller made it clear that if the deal were not done within that four week exclusivity period then there was no deal to be done. There was also a large corporate bidding for the deal who was ready and willing to buy at a moments notice and who had the financial resources to make immediate payment. As always we got there in the end and the MBO deal was delivered on time and within budget.”
"This deal was unique, it was done back to front in that the funding aspects were completed post completion of the buy out. We were under alot of pressure to close the deal within four weeks. In the end the legal documents had to be structured to allow completion of the buy out to take place with payment of the purchase price being deferred until the MBO team had sorted out the third party funding" Neil added.
