Entrepreneurs Hub advises on the sale of CatDv Square Box Systems to Quantum Corp

Type of business:
Digital Media Asset Management  Software
Location:
Warwick, UK , Boston, New York and San Francisco
Sale value:
Undisclosed

Situation

With a diverse client base including ITV, Turner (CNN, TNT, Cartoon Network, Boomerang, TCM) and Cirque Du Soleil, to Scripps Research,  NASA’s Jet Propulsion Laboratory, The Louvre Museum and beyond, Square Box Systems is an innovative software company, specialising in the development of multimedia tools. Its core products are based around CatDV, one of the leading global digital asset management software products.

CatDV is an agile, media management and workflow orchestration platform, which helps organisations with large volumes of digital media and metadata to organise, communicate and collaborate more effectively.​ A digital asset management software product that is more than a media asset management tool, it is a media and workflow automation platform. Highly customisable and configurable CatDV enables integration with a wide range of related platforms and products.

Square Box Systems offers global coverage and support with presence in both the UK and USA and clients across 6 continents. CatDV is recognised as one of the leading Sport Media Asset Management software products for broadcasters and organisations alike.

Requirements

• Identify an organisation with the scope to take Square Box Systems software products and services to reach an even wider international market
• Find a buyer with shared values of technical excellence, professionalism, and passion to deliver a great customer experience.
• Maximising the growth potential of this digital asset management software product
• Help in navigating every stage of the preparation and sale process, assessing valuation range, financial analysis and planning. Confidential marketing and approach to multiple potentially interested parties. Negotiation, due diligence, and securing agreement and completion of the final deal

Solutions

Entrepreneurs Hub Directors helped Square Box Systems (SBS) achieve a successful deal by employing the following process:

• Developed a tailored exit plan following a ‘discovery day’ and ‘detailed financial review’ and subsequent follow up to learn about all aspects of the business
• Researched and shortlisted more than 150 potential acquirers from around the world within the Digital Asset Management (DAM) / Media Asset Management (MAM) space and associated sectors
• Provided an Entrepreneurs Hub interim financial expert within the business to analyse and prepare relevant information that would be required during the due diligence process
• Prepared a Virtual Data Room which the acquirer described as one of the most detailed and well organised data rooms they had ever seen (this being regular feedback we receive from both acquirers and their advisors)
• Created all marketing documentation including:
  • Teaser Letter,
  • Information Memorandum,
  • Management Presentation to develop acquirer interest in the proposition
• Researched prospective acquirers before contact to ensure personalised message and potential value identified to acquirer of pursuing investment evaluation
• Anonymous / confidential approach of the approved list of Potential Acquirers to gain (significant) initial interest from around the world
• Secured non-disclosure arrangements to enable initial information sharing
• Arranged and chaired multiple meetings between the lead Deal Director from Entrepreneurs Hub and interested parties including technical product demonstrations of the software as well as commercial discussions
• Closely evaluated numerous offers to establish a preferred choice of buyer and optimise deal terms
• Agreed Heads of Terms and subsequently worked with the nominated Corporate Lawyer to agree the Share Purchase Agreement
• Client was delighted with the results
• Managed the sophisticated cross-border financial and legal requirements commonly associated with Fortune 500 US listed acquirers and their M&A teams

The Team

Andrew Shepperd – Director & Co Founder

 Andrew is a successful entrepreneur, mentor, lecturer, and specialist in both buy and sell-side transactions, including IP-focused sales. He oversees the EH deal making team and has first-hand knowledge of selling and acquiring businesses, including post-acquisition integration. Andrew has over three decades’ commercial leadership and M&A experience. Former MD of Avaya and Azlan and main board member of Tech Data UK. Lecturer on M&A and Investment and Advisory Board Member of the Imperial College London Global MBA and Entrepreneurship MSc programme

Tim Allaston – Director

 From IT to professional services, big data & data analytics to utilities, and social networking, beauty, leisure, construction and engineering; Tim has a vast range of expertise that he’s fine-tuned during his 30-year career to date. He brings the extensive knowledge he’s accrued to the Entrepreneur’s Hub team, helping businesses of all types discover how they can prepare for – and achieve – their most successful sale.

David Elliott – Project Director

David started his working life with Chartered Accountants Price Waterhouse, in London. Followed by a move into industry where he has experience in manufacturing, management & corporate finance , in treasury activities and significant experience in the financial aspects of mergers & acquisitions. His career in industry has spanned 30 years at Finance Manager, Finance Director & Vice President level in British, European & American corporations.

He was educated at Queens University, Belfast in Economics & Economic History and later with Advanced Studies in Business Administration at Heriot Watt University, Edinburgh.

Steve Wadsworth – Research Leads and Analyst Manager

After graduating with a BA (Hons) in History from Reading University, Steve worked as an analyst for a leading market research agency before joining Entrepreneurs Hub. He plays a key role in the opportunity validation that sits at the heart of our success and enhances the high levels of customer service that we are committed to. Leads the Entrepreneurs Hub research and analyst team.

Results

• Completed a successful sale to Quantum Corporation (NASDAQ:QMCO)
• Square Box Systems’ acquisition by Quantum will fuel significant growth as they become part of a leading player specialising in the exciting world of rich digital content
• Aligned values of technical excellence, professionalism, and passion for delivering an exceptional client experience will create larger enterprise solution opportunities
• Whole SBS team retained by Quantum
• All senior staff have been offered executive roles in the acquirer

Quotes from Rolf Howarth Founder & CTO Square Box Systems Ltd

Engagement

“I was very impressed at how friendly and approachable Entrepreneurs Hub were. They explained the process of a sale (including how to prepare your business for sale, how they value a business and find potential acquirers, the due diligence process, and what their fee structure is) in very straightforward terms, with the offer to help if I chose to use them, but there was no hard sell which I appreciated”

Preparation

“Entrepreneurs Hub helped us tremendously with a very structured approach to preparing the business for sale, everything from researching potential acquirers for us, working with us to create the information memorandum to market the business, and helping us prepare for the due diligence which any acquirer would put us through. Entrepreneurs Hub had a very thorough due diligence checklist which the acquirer was happy to adopt as it covered all the points they would need to see covered, and it meant we were ready with nearly all the answers at the once Due Diligence started”.

Completion

“The Entrepreneurs Hub team were fantastic. They put in a tremendous amount of effort throughout the process but especially towards the end once we had interest from a few parties, several of whom were overseas, Andrew was putting in long phone calls late into the night as he negotiated on our behalf to get the best possible terms. Once we accepted an offer, things intensified even more as we went through due diligence and were still negotiating details of the financials. Entrepreneurs Hub were there guiding us throughout the process and I really felt we were working together as a team. We could never had sold the business without their help. Even the company that bought us and had experience of several previous acquisitions complemented us on how professional and organised and easy to deal with our advisers were that made the whole process very smooth”.