Developing strategy and exploring options
Understanding your organisation, its vision, mission and culture as a basis for analysing strategic choices.
Developing strategy and exploring options
This is a blend of three real cases.
P is privately owned by four owner managers. Two are over 65 and wanting to stand down and realise their capital. Two are younger and want to continue. Whilst they want to address this, it comes at a time when the business is coming out of a quiet period and embarking on what could be several years of high growth. They don’t want to lose that opportunity but recognise that the younger director shareholders need to be fully focused in order to deliver it.
Sonnet was appointed to look at the options and inform all four what was possible and what it meant for each of them. The Sonnet Team explored with each as individuals what they were seeking, and their risk appetite. This was overlayed onto the development of a forward view of where P could be heading, at different levels of ambition and forward strategy, with illustrative share valuations at intervals through that. Options for debt-funded, and private equity funded transfers were explored and their values and risks illustrated.
Facilitated by Sonnet, and informed by their illustrating what was realistic, that enabled the four to discuss what they wanted to do. Sonnet helped by documenting the conclusions, and timelines for delivery, and plans were set for making the chosen option happen, with all parties understanding what was planned and why.
Contact Jim Clifford to learn more
Developing acquisitions, disposals, mergers, de-mergers, JVs and partnerships
Supporting the planning, finding partners, structuring and enabling a transaction.
Developing acquisitions, disposals, mergers, de-mergers, JVs and partnerships
The British Institute of Innkeeping (BII) is an impact-focused body whose purpose is to keep pubs thriving in the heart of every community. With members spanning all aspects of the hospitality trade, and all the corners of the UK, it supports all aspects of licenced trade from staffing and training to business development and professional services.
As part of a long term strategic advisory project with the Sonnet team, BII decided to seek a partner to acquire its Qualifications Awarding Body (BIIAB). The aim was to find an acquirer with the skills, experience and capabilities to develop the existing business, further develop it, and to support BII’s mission to increase skills in the workforce in licensed premises and hospitality.
Alongside advising on the early stage of planning for the sale transaction, Sonnet delivered research to identify potential acquirers that would fit with BII’s strategic vision and impact focus. We presented the business to acquirers and led negotiations on behalf of BII. This led to the sale of BIIAB to SEG Awards in February 2021. In parallel with the sale, the two organisations agreed to various forms of joint working for the benefit of the licensed trade and those working in it.
Contact Chris Theobald to learn more
Valuations of businesses, assets and branding
Helping you to understand the financial value of your brand, for example in partnership arrangements.
Valuations of businesses, assets and branding
Trinity College of Music wished to acquire a BCELT, a partner organisation focused on the promotion and sale of Trinity’s English Language exams in key regions of Italy. Its aim was to secure its presence in and commitment to the continental Europe market and to secure the pipeline of activity held for Italy.
Members of the Sonnet team advised Trinity on the valuation of and options for structuring the transaction, providing negotiation support and financial due diligence on BCELT on behalf of Trinity. Our advice included identification and management of risks, including using the structure of the transaction to manage risk exposure in a balanced way to meet the needs of both parties. Our valuation support focused upon helping Trinity to understand the current value and its potential value post-acquisition. We co-ordinated an international advisory team to project manage transactional, financial, legal, commercial and tax work streams.
The transaction completed successfully, and BCELT has been harmonised with the Trinity brand, as Trinity College London Italy.
Contact Chris Theobald to learn more
Raising finance for impact
Helping you to navigate the world of social and impact investing to raise funds for your project; matching your goals with those of your investors.
Raising finance for impact
Vista is the leading local charity supporting people who have encountered sight loss both as individuals and in relatives. It covers Leicester, Leicestershire and Rutland. It is planning a new development to modernise its services and combine them to a single, purpose built centre for sight loss. The new centre will be fully accessible and will open opportunities for other organisations to use the space, including other sight loss charities and health services. The site includes a 72 bed residential home that will specialise in care for people with sight loss.
Vista’s beneficiary group are at risk of struggling to navigate between different services: the new centre will enable them to receive support in a single location and act as a hub for a community of beneficiaries and their families and carers that will grow around it. The new centre will offer a modern, high quality service tailored to meeting their needs as effectively and holistically as possible.
Sonnet helped Vista to assess its options for financing the construction project, and to feasibility-test these, helping the Board to agree a strategy for funding the project. We then developed material to present the prospect (both as an investment and in impact terms) to lenders and are currently supporting on negotiations with social investment and banking sources to obtain that finance.
Contact Chris Theobald to learn more
Improving investment readiness
Bringing an investment perspective to due diligence and offering support in filling gaps and increasing ‘investability’.
Improving investment readiness
Omega is a substantial care group providing residential and other support to people with learning difficulties, autism, and other neurological conditions. It is in the process of acquiring several residential properties in which it has provided supported living services for a number of years. The Board were keen to understand options for financing the transaction, including to assess and prepare for the option of using social investment.
Sonnet delivered feasibility analysis, enabling Omega to assess options for structuring investment, and to understand and assess risks and scenarios. We also helped to review the readiness of the organisation to approach the social investment market, focusing on preparedness for financial due diligence as well as supporting the organisation to develop an investor-friendly presentation of impact and Theory of Change.
This has enabled Omega to gear itself up to taking on the finance, and to understanding how the funders think and how to work effectively with them. This will also enable Omega to present transactions risk more helpfully to the funders, encouraging them to provide appropriate and flexible facilities.
Contact Chris Theobald to learn more
Social investment planning for funders
Developing an impact-led portfolio plan, and investment assessment procedures.
Social investment planning for funders
Macmillan Cancer Support is a major UK charity providing care and support to people of all ages living with cancer. As part of its mission, it makes grants to support the development of new mechanisms, treatments and tools that can help people better. It wanted to expand the routes for that support into an impact investment model, allocating a pool of funding to be managed as an investment portfolio.
Sonnet worked with the Macmillan Innovation Partnerships team to develop the plans for this portfolio, and the systems and infrastructure needed to make it work. With additional insights from Sonnet’s experience advising others from institutional funders to social sector ones, and from its associates with front line experience in running similar portfolios, a balanced financial and investment plan, with supporting Investment process and controls was developed. This not only looked at good control and viability, but also value growth, principles and policies, and how it could ensure it delivered real impact, and could measure and report upon it.
With the benefit of learning for the wider executive and the Board through the process, the plans were approved by the Macmillan board, and the first investment in the portfolio was made in early 2023. Sonnet is providing ongoing support with the developing portfolio, including due diligence on some future investments.
Contact Jim Clifford to learn more
Financial analysis and expert witness services
Producing analysis of financial information from single or multiple companies; and presentation in report form for internal use, third party discussion, insurance claims or legal proceedings.
Financial analysis and expert witness services
B is a London-listed Leisure Group, with premises in various location around the UK. Not long before the COVID pandemic one of these had to be shut when water entered through a poorly maintained roof caused damage and exposed asbestos. B was in dispute with its landlord, and needed an evaluation of its trading losses for the purposes of settlement, and an Expert’s report in the event the dispute went to court. This was made more complex by the period of closure spanning COVID lock-downs and reopenings.
Jim Clifford led the project as named expert. Sonnet reviewed the outline calculations from B’s CFO, and identified a number of areas needing revision. These spanned the mapping of trends from equivalent sites, the closure and recovery that would have been seen around COVID lockdowns, comparing demographics for different areas and how they affected the mix of clientele, costs saved and recovered, and the losses during the build up of the eventual reopening.
We produced workings of our alternative calculations and worked through these with counsel and B’s team. We produced a draft report which informed discussions with the landlord. A settlement was reached, not least helped by the robustness of the analysis and clarity of the explanation of the losses.
Contact Jim Clifford to learn more
Due Diligence
Review of financial, commercial or operational information and assessment of risk prior to taking on or parting with a business.
Due Diligence
Sigma, a charity focused on health and safety, was seeking to enhance its impact by diversifying to reach a new segment of its beneficiary group. It identified the potential to acquire a privately-owned business that was engaged in providing related services to the target group.
Members of the Sonnet team advised the charity on valuation and transaction structure initially to underpin their proposals and inform their offer. Following acceptance of their offer, we delivered a financial due diligence view, taking a risk-based approach to focus on matters of greatest significance to the client, and working alongside legal and technical advisers to support the client in confirming its decision to proceed. Following our review, we supported the client to negotiate in further detail to address risks and issues uncovered during our work.
The transaction completed successfully, with Sonnet advising throughout the process, including providing analysis and guidance on commercial and financial matters in the contract, working alongside the client’s legal advisers. The client was successfully able to implement steps to signpost those using the target company’s services towards its core pre-existing activities with the aim of further enhancing its impact.
Contact Chris Theobald to learn more
