Hired by Nicholl Food Packaging to find a suitable investor, Livingstone Partners knew the deal required using a virtual data room to reach international suitors. With IntraLinks, Livingstone wrapped up a superb deal with a US-based private equity house for the leading aluminum foil packaging manufacturer.
Nicholl Food Packaging has grown into a first-class European supplier of aluminum foil containers in under two decades. Founded in 1989 by Wilson Nicholl, the company today employs 400 people and sells 1.200 products to blue-chip food producers, supermarket bakeries and take-out restaurants
In 2006. management of the privately-held company eyed growth opportunities in Eastern Europe and North America. At the same time, Wilson Nicholl began preparing for semi-retirement and looked for an opportunity to step down as chairman.
To achieve both goals, Nicholl and co-owner Roy Dixon decided to sell a controlling stake in the company to an investor committed to expanding the company. The owners retained mid-market investment advisors Livingstone Partners to find the best offer.
Phillip McCreanor, head of Livingstone’s Industrial Sector, contacted a select group of potential trade and private equity buyers. McCreanor talked to UK and pan-Europe players, US funds, and global houses, each of them bringing something different to the business.
“Cross-border M&A used to be less joined-up: the market has now developed and we are seeing more companies looking at cross-border transactions,” explains McCreanor.
After playing buyers interest, Livingstone sent each an information memorandum, delivered in one of Nicholl’s aluminium trays. The attention-grabbing move worked, Each potential buyer submitted an offer, From these, Livingstone selected a limited number and opened due diligence process
To meet the challenge of providing teams of buyers located around the world equal access to the reams of due diligence information, Livingstone chose to use an online data room.This way. all of the documentation would be available any time of day via a secure web site any number of advisors and executives from potential buyers could access the information straight from their desktop at their convenience, Trps across town – or oceans – to view documents in paper data rooms become a thing of the past.
“An online data room widens the group of buyer5, as everyone knows they will have a level field,” says McCreanor.” Without it, sellers run a significant risk that international players might find it too difficult to compete with local buyers, lose interest and drop out.’
Livingstone selected Interlinks as the online data room provider for the deal, McCreanor’steam knew that Intralink’s market leadership means that the potential buyers would be familiar with the platform, and thus would require virtually no learning curve.
“Interlinks is the platform used most often in the UK,so most people involved in M&A and private equity deals know,”says McCreanor.”It’s a familiar environment for users that facilitates their due diligence without getting in the way.
Livingstone trusted that Interlinks offers the security required to manage highly confidential information – a key feature for Nicholl. Senior management at Nicholl were impressed with IntraLink’s presentation, and could see that the IntraLinks virtual data room would help their process.”
Creanor’s team worked closely with Nicholl to determine what information potential buyers would need. They then gathered and scanned the paper documents and uploaded them to the virtual data room. IntraLinks shared best practices for indexing the documents learned through facilitating hundreds of deals.
All told, Livingstone posted 20 to 30 thousand pages of information Livingstone layered access to the documents,so that the most sensitive were provided later in the process and only to those buyers who were most interested. Security permissions were granted for each document to bidders individually or in batches. The air tight security maintained confidentiality throughout the process.
“IntraLinks takes what is a time-intensive burdensome process in the paper world and makes it easy for sellers via the online world, “says McCreanor. “And it enabled us to access US funds, to do so quickly. And to offer access to information around the clock. These are important factors for a mid-market firm like us to find the best strategic investor for our client.”
Buyer groups were also pleased. They simply logged on to the site, found what they needed, and reviewed information on their schedule. This convenience proved especially helpful for buyers working on multiple deals.
IntraLinks also expedited the process each buyer team could review documents at the same time. As a result, Livingstone completed the Nicholl transaction in just six months – quick for a cross-border deal.
Along with easing the document review process, IntraLinks provided valuable tracking information. McGregor’s team could quickly see which buyers were active or merely kicking the tires. Knowing this information helped them determine access privileges for sensitive documents released later in the process.
“It was very helpful to keep track of who was using the bathroom, and which documents were triggering questions, reports McGregor.
Additionally, monitoring buyer behavior helped calm the nerves of Nicholl’s shareholders. First-time sellers typically ride an emotional roller coaster, rising in response to many inquiries and plunging when the phone stops ringing. If a buyer goes quiet for a few days, it may be that he’s lost interest, or simply that he’s heading down working on the deal.
“IntraLinks can show behind the scenes who is no longer engaged and who is still driving hard, regardless of the number of phone calls or office visits,” explains McCreanor.
In November, Nicholl’s owners sold a controlling stake to US-based AudaxGroup. Nicholl got what it wanted: a fair price and a superb partner to help the company grow in Europe and the US
“IntraLinks played an important role in our success because it enabled us to involve the US buyer community.” says McCreanor.“The virtual data room aided Audax and allowed them to remain competitive.”
Nicholl Food Packaging is a specialist manufacturer of aluminum foil containers and catering disposables for all sectors of the food industry throughout the UK, Europe and other international markets. The company is one of the largest food packaging companies in the UK. Nicholl pioneered the manufacture of smooth wall trays for the food processing sector and is the market leader in this packaging medium, which is becoming increasingly prevalent on retailers’ shelves, Nicholl and its subsidiaries Ecopla and Watson Watson provide an array of choices from standard and smooth wall trays to packaging machinery and lidding options.