Bluefin Solutions

Deal summary

Bluefin Solutions is an award-winning global IT consultancy. It works with blue chip multinationals to manage digital transformation by applying expertise in SAP, analytics, digital, web and cloud. Since inception in 2002, the business has grown quickly to become the UK’s leading SAP consultancy with one of the industry’s most highly regarded SAP HANA teams, SAP’s next generation enterprise software.

Bluefin’s shareholders were keen to find a strategic partner that would assist in accelerating the growth of the business whilst also allowing their innovative and entrepreneurial culture to continue to flourish. The shareholders felt this partner would value the business highly, although they were unsure whether a trade sale or a private equity transaction would best achieve this outcome. They had also recognised the business would need an intensive level of preparation for a transaction process.

We were recommended to the shareholders due to our sector knowledge and our relationships with the most appropriate range of financial investors and strategic acquirers, both in the UK and overseas.

What difference did we make?

Due to the quality of the business and the growth opportunities available to it we knew there would be a number of interested parties. However, we also knew our client’s requirements would only be met by the most strategic of these. Therefore, our deal strategy was to run a process that allowed us to identify early the small handful of potential buyers we should focus on.

The initial phase of this was a comprehensive pre-screening of both trade and financial buyers. Due to the depth of understanding we had of the business, the shareholders’ objectives and the buyers’ strategic rationale we were able to focus on a small number of parties to include in a full process to a small number of multinational strategic acquirers.

In parallel with this work, we spent time stress testing the business, ensuring we were prepared for diligence and that there would be no grey areas that might provide a negotiation opportunity for a buyer following the heads of terms. Ultimately this enabled swift and effective engagement with potential buyers and protected value throughout the transaction process.

This approach of focusing on the most strategic parties soon elicited two very attractive offers – one from a global blue chip professional services firm and one from an emerging market-headquartered IT consulting business. We were then able to use this competitive tension to negotiate a heads of terms that incorporated the shareholders’ aspirations (the valuation achieved represented 17x EBITDA) with their preferred party, Indian-based Mindtree, a global IT consulting firm.

The shareholders had a preference for Mindtree, which had a clear need for SAP consulting expertise to expand its presence in Europe and to accelerate a digital strategy. In addition, Mindtree bought with it a significant US presence, a market where Bluefin wanted to accelerate its SAP HANA expertise.

As well as headline value, the heads of terms incorporated details around working capital, value-related assets and structuring the locked box mechanism to protect the expected net proceeds to shareholders during the exclusivity period. Exclusivity was granted for a short period with its continuance linked to the achievement of certain transaction milestones by pre-determined dates.

The deal completed on the value and key terms agreed in the Heads of Terms, delivering a market leading value in a very efficient process, demonstrating the success of the deal strategy employed.

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What our client said
"The team at Catalyst did a fantastic job. They understood the importance of culture and values to us in the process, and found the right strategic partner for us to drive the business forward. I couldn’t recommend them highly enough." James Appleby
Group Chief Executive, Bluefin Solutions