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A change of plan

Case Study

Mergers and Acquisitions work is, in many ways, the cornerstone of LCN Legal’s business. All our senior lawyers have a strong background in international corporate M&A work, and it’s this hands-on experience which enables us to bring a genuinely commercial view to everything we do.

The client in this case is a software developer that has created an innovative product which helps people to make online payments without revealing their card or account details. When we first started working with them they had not yet begun trading, but were preparing to do so. We were brought in to work with them on a restructure project, consolidating their operations in the USA, the EU and elsewhere under UK ownership.

The reorganisation was well underway, and group was almost ready to launch its product and start trading, when the main investor pulled out. Of course, this created a very serious problem: without an injection of capital the group would become insolvent within a few months. The directors decided to sell the business to a large US-based software firm.

In theory, our client was in a somewhat strong position due to the valuable IP that it owned. But this kind of product needs people who know the software, and those people will quickly find new jobs if they feel that their employer might stop paying them. So it was vital to get the deal done as quickly as possible.

It took about six weeks from start to finish. Even when speed is a factor, all the stages of a transaction must be carried out properly. It’s never easy to negotiate when you don’t have many strong cards to play, but the fundamentals still apply: understanding the client’s business and the key drivers of the deal, including the associated risks. Then working out an appropriate structure for the transaction. Then managing the process pragmatically, efficiently and cost-effectively.

Perhaps the biggest tribute to our work is that the investment bankers who advised the client’s shareholders during the deal have since given us the opportunity to work with them on other M&A projects.

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