Renaissance is a recruitment consultancy based in London and Marlow, Buckinghamshire and with an associate office in San Francisco. It was established in 2004 by founder Tony Willis and his business partner Sebastian Kyall. Renaissance recruits C-suite management for Technology companies and has 13 employees.
In November 2016 Gerry was appointed by Renaissance to evaluate various exit options for the Founder Shareholders. After considering a range of exit options including trade sale and a sale to a financial buyer, the Founder Shareholders concluded that their preferred option was to transition to employee ownership through a sale of 100% of the Founder shareholdings to an EOT.
RVE constructed a financial model to value the Company, which involved valuing the business on a multiple of its sustainable profits, then adding the Surplus Cash in the business (the cash that was not needed to provide working capital to the ongoing business). The valuation is needed to set an independent price for the business, at which the EOT will buy the shareholdings in the Company and the Founder Shareholders will sell.
After valuing the Company, the most appropriate earn out profile was structured. The Founder Shareholders were issued Loan Notes repayable over a 3-5 year period, funded by the projected profits of the Company, plus 10 year interest bearing Loan Notes repayable at Year 10.
After preparing the valuation, structuring the earn-out and drafting Heads of Terms (which set out the key legal terms of the transaction), the Transaction was submitted for HMRC clearance. Clearance was received from HMRC within two weeks.
Gerry also advised on the appointment of Trustees to the EOT and was subsequently invited and agreed to act as Chairman of the EOT.
The transaction completed in June 2017. The deal value has not been publicly disclosed.
Since the deal was completed, the business has performed strongly and new senior staff have been recruited to join the team. The earn-out is being paid down ahead of schedule and levels of employee engagement in the business are strong.
The Renaissance Leadership team
“When I started to examine the options to realise value for my business, it became clear that the traditional exit route of a sale to a competitor or a financial buyer would not achieve my goals. I wanted to realise a fair value for my business but also preserve the client relationships and corporate culture which were the foundations of the business’s success. I also wanted to stay involved in the business (in a full or part time capacity) until I felt ready to finally retire. The advice I received from Gerry was excellent. He talked through the different exit options and explained the benefits of an employee buy-out using an Employee Ownership Trust. There was an obvious fit with what I wanted to achieve, and I could realise the value of my business over time without incurring capital gains tax. Since becoming employee-owned the business has continued to thrive. Overall, Gerry gave excellent advice, structured the transaction effectively, and was extremely professional and efficient at managing the whole process. I would highly recommend Gerry and RVE.”