Celerant Consulting
Deal Summary
Catalyst advised on the $77 million management buy-out of Celerant Consulting from Novell Inc backed by Caledonia Investments plc.
Celerant is a global operational management consulting firm that works with clients to help them transform their business and operations performance and has a number of areas of expertise including asset management, process excellence, organisational alignment and effectiveness, revenue growth, supply chain and technology enablement.
Led by Ian Clarkson who founded the business twenty years ago, Celerant works in a wide range of sectors with a particular focus in chemicals, energy, life sciences, manufacturing and utilities.
What difference did we make?
Celerant was owned by American corporate Novell Inc who had appointed Citibank to run a disposal process.
Working with the management team, we persuaded Citibank that the deal was more likely to complete if the base document was a Catalyst produced management business plan rather than a Citibank prepared vendor information memorandum.
One of our greatest challenges in completing the deal was that as a global business, with over 500 staff in twelve countries, over 150 senior managers had an existing equity holding in the company. Having focused our initial work on business planning and financial modelling in order to assess the value of the business and the most appropriate funding structure, we decided to price the business on an equity value basis rather than an enterprise value basis as we believed the working capital could be better managed in this way.
All 150 current shareholders reinvested in the buy-out, with significant work undertaken to come up with a commercial, yet tax efficient, structure that would work in a large number of different tax jurisdictions. In addition, an innovative banking package was put in place which has no debt repayments in the first 5 years and thus provides management with significant cash headroom within which to manage the working capital of a growing business.
