ICON66 – Volume 5
Projectlink Motivation sold to The Grass Roots Group Plc
Faster faster
Projectlink Motivation based at Teddington, London, was founded in 1984 by Richard Kirk and is the fastest growing full-service motivation house in the UK with a turnover of more than £40m. It provides incentive and motivation services and products to many of the leading companies in the UK such as British Telecom, Royal Bank of Scotland, Astra Zeneca, Nationwide, Lloyds TSB, Abbey National, MFI and Oracle. Projectlink’s brands include Supercheques, theincentiveshop.com, Landmark and Flexi Vouchers.
Motivation
Having built the business up over nearly 20 years, Richard and his fellow shareholder Stephen Humphreys wanted to realise some of the value they had created in building the group, but they also wanted to remain with the business. There were a number of potential interested parties including competitors, overseas players wanting to enter the UK market and listed companies in the UK in related and complimentary businesses.
Continental capers
We approached a cross section of potential acquirers and had meetings with 7 to establish the strength of interest. We then entered into detailed discussions with several of them, including two overseas players. However, beware the foreign buyer. For many vendors the idea of a foreign company paying a large amount of cash for their business is their ideal scenario. However, the reality is that bureaucracy and decision making processes are quite different, particularly in Europe and this can play havoc with the timetable unless managed properly.
No sex before marriage
“Selling your business is like getting married”, it’s an emotional experience. Vendors have often built their businesses over a considerable time and they need to be courted properly. Suitors who don’t recognise that, who are too arrogant or who look to get “up close and personal” without the right sort of foreplay are often sorely disappointed!
Cultural fit
We received several offers but the vendors had a relatively simple choice given the cultural fit and the attraction of the offer they received from Grass Roots. Crucially the two respective Principals had, over a period of 20 years, built up a healthy mutual respect for each other. Also Grass Roots, who are a larger UK competitor part owned by WPP Group Plc has a very strong balance sheet and we thought they had a good chance of delivering the deal. Heads Of Terms were signed with The Grass Roots Group and they entered exclusive talks, leading to completion six weeks later.
Largest in UK
Following the acquisition, the combined group has a turnover of £115m and becomes the largest motivation and incentive company in the UK. Richard Kirk, the founder of Projectlink and Stephen Humphreys the Managing Director will remain with the enlarged group. The deal was structured with cash initial consideration (which was not disclosed) and a three-year earn out.
Cultural fit
Richard Kirk said: "ICON’s commitment to the process over two and a half years was invaluable. They introduced us to a good mix of potential buyers, enhancing our knowledge of the market and the players. Whilst I was surprised by the behaviour of some buyers during the process, it only enforced our belief that there was an excellent cultural fit with Grass Roots".
Corporate
Finance advisers
ICON Corporate
Finance
Vendor’s
tax advisers
Berkeley Hamilton
Vendor’s
legal advisers
Russell Cooke,
London
