Pitch Best MidCap Deal 2021: NPM Capital – ICT Group
Bekijk alle pitches & stem direct
Name of the deal: Public Offer for all shares in ICT Group
Date closed: 26-07-2021 (date declared unconditional)
Published value: 140.6 mln (€)
Buyer(s): NPM Capital. Teslin Participaties
Target: ICT Group
Seller: ICT Group Shareholders
Involved firms and advisors buy side:
Rabobank (M&A Advisory), Deloitte (Tax and Financial Due Diligence), Allen & Overy (Legal Advisory Corporate/M&A), Clifford Chance (Legal Advisory Corporate/M&A), Confidant Partners (PR advisor)
Involved firms and advisor's target:
AXECO, ING (M&A Advisory), De Brauw Blackstone Westbroek (Tax and Legal Advisory), KPMG (Financial Due Diligence), CFF Communications, Lindner & van Maaren (PR Consultancy)
Involved firms and advisors sell side:
AXECO, ING (M&A Advisory), De Brauw Blackstone Westbroek (Tax and Legal Advisory), KPMG (Financial Due Diligence), CFF Communications, Lindner & van Maaren (PR Consultancy)
Pitch
Brief description deal / Deal outline
ICT Group, a Dutch industrial-technology solutions provider, and a consortium led by NPM Capital, a Dutch private equity investment firm, have reached an agreement on a recommended all-cash public offer by the offeror for all shares in ICT Group at an offer price of 14.50 euros (cum dividend) per share, representing a total consideration of approximately 140.6 million euros. The consortium is committed to support and accelerate ICT Group’s strategy of driving organic growth and growth through acquisitions and intends to make equity financing available in the amount of up to 200 million euros to actively support ICT Group in pursuing add-on acquisitions. ICT Group’s corporate identity, values and culture will be maintained and its existing Executive Board will continue to lead the company.
Why should this deal win the Award for Best Deal MidCap 2021?
A public to private transaction is a complex deal, given the public shareholder base, hence often executed only in a bilateral setting from the start. In this case an auction process was organised which implied that the process had to be executed extremely diligently and carefully to minimize the risk of leakage given the public nature of the company. The process was marked by excellent preparations by ICT Group and the Consortium led by NPM Capital demonstrated strong execution skills in a compressed timeline. Management of ICT Group managed to minimize disruptions to the business during the auction process, which evidences the extraordinary skills of the management team. The Consortium led by NPM Capital recognised the strong potential of ICT Group in a private setting and emerged as winner of the auction process. In this new setting, management has more flexibility to execute its organic growth plans and the company can accelerate its inorganic growth plan with the strong support of NPM Capital and Teslin. The new long-term shareholder structure enables management to dedicate all energy and focus on running and strengthening the business without all requirements that are attached to a public listing.
After proceeding to the final phase with NPM Capital and Teslin in a bilateral setting, close cooperation between seller, purchaser and its advisors enabled a fast track towards declaring the offer unconditional and reaching over 95% in the post acceptance period. The purchaser took a proactive approach towards all shareholders / stakeholders as of the announcement date of the public offer, resulting in, for example, the preparation of the offer memorandum in a short time frame through short lines with the AFM and close cooperation amongst all advisers. The purchaser’s proactive approach also entailed close monitoring of the developments on the shares being offered, assisting shareholders where needed and answering any questions they might have to allow for a smooth tendering process. The shares being offered ultimately reached 95% after the post acceptance period of 2 weeks.
Besides being able to add value to ICT Group in organic and inorganic growth plans, NPM Capital and Teslin also recognise the importance of the role ICT Group plays in the working environment with IT personnel recognized as being of increasing importance across virtually all industries.
ICT Group enables companies to have temporary access to skilled IT personnel to ensure operations continue without interruptions. As IT is essential to all companies in a highly digitised world, ICT Group wants to grow not only to its own benefit, but to better service its clients. Management considers the contribution of ICT Group to the continuity of companies, and there with the continuity of many services and products which are used in everyday life, as a crucial aspect to what motivates its employees in their daily work activities. This culture and vision is strongly supported by both NPM Capital and Teslin. Going forward, the clear ground rules are to maintain an open dialogue between management and the shareholders to support management in seizing opportunities and continued innovation, and as a result continue to build and strengthen ICT Group’s position as a positive role model within society.
Deal rationale:
During the summer of 2020, ICT Group performed a strategic review to identify, review and evaluate strategic options available to accelerate its current growth strategy. Following this strategic review, the Executive Board and Supervisory Board of ICT Group (the “Boards“) concluded that ICT Group could optimise its position as a strong partner for clients, suppliers, employees and other stakeholders by enhancing its geographic presence and increasing its scale. Having reviewed and considered various alternative strategic options, the Boards concluded that a private environment would be optimal for ICT Group to realise its ambitions. Such an environment could provide access to a substantial amount of capital to finance organic and inorganic growth and could better position ICT Group to execute on M&A opportunities available in the market.
What is the impact of this deal on the company?
NPM Capital and Teslin are reputable Dutch investors known for their long-term commitment with an entrepreneurial spirit and a solid track record of supporting management teams in growing their business. They will provide ICT Group with knowledge, expertise and financial backing for investments and acquisitions in accordance with ICT Group’s long-term strategy and are committed to support and accelerate ICT Group’s strategy of driving organic growth and growth through acquisitions and intend to make equity financing available in the amount of up to EUR 200 million to actively support ICT Group in pursuing add-on acquisitions. ICT Group’s corporate identity, values and culture will be maintained, and the employees of ICT Group, and existing rights and benefits of ICT Group’s employees will be respected.
What is the impact of this deal on the direct stakeholders?
The transaction reflects a compelling offer price for ICT Group shareholders, while best safeguarding the interests of both ICT Group employees and customers. Therefore, the impact on the direct stakeholders besides the shareholders is limited at first, but as the business continues to grow the employees will have more personal development opportunities, e.g. having a chance to work on more interesting and more diverse projects and with the envisaged increased scale of the business customers can be serviced better.
What is the impact of this deal on society?
ICT Group provides companies with temporary (short and long term) personnel to ensure companies can continue their business without disruptions (supporting business continuity and success). ICT Group’s clients span across sectors and regions, delivering value to society through their operations. By supporting business continuity and the growth of their clients, ICT Group safeguards the functioning of sectors and societies. The new shareholder base will allow ICT Group to grow faster, to better organise and act upon opportunities in the market, and focus on innovation; which will translate into continued and enhanced value add for society.
What was most complex about this deal?
Organising an auction in a public setting comes with a high degree of complexity and many challenges, also involving a broad range of stakeholders. The thorough preparation by ICT Group and the swift execution by the ultimate acquirer made this seem much easier than it truly is. Moreover, a special committee consisting of two Supervisory Board members (the “Special Committee “) was appointed to safeguard the interests of ICT Group’s stakeholders and ensure a full and thorough process. The Special Committee and the Boards have frequently and extensively discussed the developments of a proposed transaction and related key decisions throughout the process. ICT Group and the buyer agreed to certain covenants, including covenants on strategy, employees, corporate governance, leverage and other non-financial matters, for a duration of three years after settlement. ICT Group and the buyer also agreed to covenants on minority shareholders.
