Spiral x Discovery
When Spiral assessed their options to realise their vision, Discovery became the perfect partner - all with the backdrop of COVID-19
Their
question
To realise our vision, do we raise additional money or pursue M&A?
Our
answer
We conducted a review of the business, and all things considered, wanted to explore strategic M&A exit opportunities. We led the process from start to finish
Exploration
Once we'd understood the client's position, we wanted to test the market.
The best option to potentially realise the broader vision of the business was to seek a partner through a M&A process. The thinking here was that it would provide the company with the additional resources, distribution and expertise (particularly in the US) to fuel its growth with districts and teachers alike. As a result we prepared a teaser document to present to potential interested parties.
We began with a list of three tiers, prioritised based on firepower, strength of existing connections we had and strategic fit with the business. This allowed us to quickly validate any substantive interest in the company and therefore rapidly refocus our priorities based on continued feedback and responses. It also allowed us to update and refine the potential list of acquirers, as we became aware of different company priorities, sector trends and firepower.
Conversation
Once we had some interest, we wanted to discuss further, and the founder presented to them.
We wanted to better understand their strategic interest from an initial conversation, which the lead advisor took with the interested parties (often CEOs, Heads of M&A / Corporate Strategy professionals. Only when we felt there was a strong enough opportunity to consider, did we progress the conversation to a management presentation.
Here, we allowed the founder to present Spiral to the leadership teams of the various parties involved. This allowed for a strong mutual understanding to develop (or not), and for the potential buyers to better investigate the product - its immediate use cases, areas for improvement and synergies with their existing portfolio.
Negotiation
Fortunately, interest turned into further diligence and an offer letter.
Through existing conversations, we guided the founder through the relative advantages and challenges of each particular buyer and the likely offer that would arrive. When an offer arrived, we made sure to consider it in its entirety and advised on the best course of action in the time allotted. We led the negotiations on price, and made sure to validate our thinking with existing investors in the business with the founder, to get them on board with the offer.
Once approved with existing parties, we managed to negotiate a good deal that worked for all parties, in a relatively timely manner. During this phase of the process, we had already worked with the founder to organise a VDR with materials ready for the ensuing DD process. This was due to ensuring we always kept our side of the bargain regarding timing.
Closure
Looking back, it was a pleasure to work with all parties all the way through a smooth process.
Great deals work when the parties involved show mutual respect and understanding, are timely in their decision making and actions, and honour their commitments. Fortunately with both the founder (our client) and Discovery, we managed to match two parties that shared common values, conviction in their decision making, and a deep willingness to conclude a transaction.
We know that Spiral will thrive in the Discovery portfolio, and are grateful for the founder for entrusting us to represent his company, and for Discovery for being a collaborative thought partner throughout the process.
Awards
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