Succession buyout of specialist technology research consultancy

Our team provided advice on a succession buyout at a specialist technology research consultancy which supports UK and overseas public sector clients on their innovation strategies and processes.

After a period of growth in the last few years, and thinking about retirement planning, the owner-director of the business (and his spouse) asked PEM Corporate Finance to devise a succession buyout plan. The client wanted an orderly succession of company ownership, transferring equity to key members of the management team, meaning more people will benefit from the success of the company.

The client’s company works exclusively with government departments, agencies and public bodies, offering impartial, science-based advice. The company can perform feasibility studies, prototype system development, laboratory experiments, and field tests. Technologies associated with homeland security are a particular area of focus.

This deal was completed during the pandemic lock-down, hence negotiations had to be carried out entirely via video call. This method of communication was increasingly difficult during the transaction, given the highly sensitive nature of work carried out by the consultancy, with projects often requiring government-level security clearance.

The founding director of the company retained a minority stake in the newco and a role in the leadership team. The succession buyout was enabled by use of Vendor Loan Note.

Legal advice was provided by Laurence Evans of HCR Hewitsons.