Lawrence Stephens’ Corporate and Commercial team recently acted for Activate Group Limited in its acquisition by Elysian Capital, in a deal which was completed on 22 January 2024.

Handling over 250,000 claims a year, Activate Group provides accident management services to insurance groups and corporate fleet operators. Their acquisition by private equity firm Elysian Capital will provide investment to allow the group to continue to grow and develop its UK operations.

The team was led by Managing Director Steven Bernstein, with assistance from Senior Associate Angela McCarthy, Associate Aashay Knights, Solicitors Lucy Cadley and Carla Bernstein, and Trainee Solicitor Avni Patel.

Steven commented: “Growing from a small start-up to a UK-wide business, this acquisition represents an exciting new chapter for Activate, as the group continues to build upon its existing services while retaining its core expertise and identity.

“It was a pleasure to work alongside Hannah and the team from Activate to secure a result which pleased all parties – and represents exciting new growth for the Activate business.”

Hannah Wilcox, CEO of Activate Group, commented: “Steven and the team at Lawrence Stephens handled the deal smoothly and professionally, and provided crucial legal and commercial advice. They achieved excellent results on our behalf, and we are delighted to begin this new relationship with Elysian, which will allow us to continue to expand and advance our operations under a larger umbrella.”

James Lyons, Director in the Corporate and Commercial team, discusses the wider market implications of travel giant Tui’s plan to delist from the London Stock Exchange, in Law360.

James’ comments were published in Law360, 05 January 2024, and can be found here.

“Whilst some may perceive this as a blow to the appeal of a UK listing, this decision should be viewed within the particular context of TUI, a German company borne out of a legacy merger.  It already has listings in Frankfurt and Hanover, and more than 75 per cent of the trading in its shares occurs in Germany, so this is a decision which appears to be being made for reasons very specific to TUI rather than necessarily reflective of the London market itself.  

“But it is indicative of the global competitive listing environment and another example to demonstrate why the FCA cannot rest on its laurels and should continue to push forward with changes to retain the appeal of the London market for international businesses.”

Lawrence Stephens acted on behalf of the shareholders of the Heath Crawford and Foster Group in a complex transaction to complete the sale of Heath Crawford & Foster Holdings Limited including its subsidiaries, Heath Crawford & Foster,  ABA Insurance and Merenda & Co Limited  to The Clear Group, the award winning and leading insurance group.

Heath Crawford & Foster was founded in 1982 by Paul Weinberg, who will continue with his team to drive forward its growth strategy under The Clear Group umbrella. The acquisition is a continuation of The Clear Group’s long-term consolidation strategy to build a balanced and sustainable business.

The deal was led by Lawrence Stephen’s Director and Head of Corporate and Commercial, Jeff Rubenstein, with support from Associates, Charlotte Hamilton and Aashay Knights, Solicitors, Isobel Moran, Lucy Cadley and Carla Bernstein, and with property aspects being handled by Director, Nick Marshall. As a full service law firm this deal highlighted the effort across the Corporate and Property teams at Lawrence Stephens that enabled this complex transaction to come to an efficient completion.

Jeff Rubenstein comments on the deal: “Having met Paul Weinberg many years ago, I was delighted that we were chosen to represent Paul and his team on a deal which I am convinced will strengthen the trajectory of The Clear Group’s consolidation plans and broader offerings. This transaction strengthens our position as lawyers who have an in-depth knowledge and expertise acting for owner managers in the financial services and insurance broker market.

We were delighted by the collaborative nature of all involved both from The Clear Group and its external legal  advisors in showing a  willingness to get the deal done.”

Paul Weinberg comments on the deal: “Jeff and the team at Lawrence Stephens provided clear and sensible legal and commercial advice throughout. When things became more complex, they were able to address each aspect of the deal. They displayed patience, creativity and resilience whilst at the same time kept up the momentum to get the deal across the line. We were delighted to have them by our side.”

Lawrence Stephens’ Corporate team recently advised ALS Dental on the acquisition of Aesthetic World, Oakview Restorations and APlus Dental Lab, in deals which were completed throughout March 2023.

Aesthetic World, Oakview Restorations and APlus Dental are specialist dental laboratories, equipped with the latest in dental technology. These acquisitions have bolstered ALS’ growing presence in the industry and widened their portfolio of labs across the UK with A Plus being based in Dundee, Oakview in High Wycombe and Aesthetic World in Bolton.

For these three deals, the teams were led by Senior Director Steven Bernstein and Senior Associate Katherine Zangana, with assistance from Associate Aashay Knights, Solicitors Lucy Cadley and Isobel Moran and Trainee Solicitor Carla Bernstein.

Katherine Zangana commented: “The team and I enjoyed working with ALS on these acquisitions, and we managed to swiftly and efficiently negotiate these deals which pleased all parties involved.”

ALS Dental commented: “We were incredibly impressed by the work of Katherine, Steven and the team at Lawrence Stephens, who worked hard to get these acquisitions across the line. Their tenacity, speed and industry knowledge were invaluable in this process and has allowed us at ALS to further strengthen our position as industry leaders in dental technology.”

Lawrence Stephens’ Corporate and Commercial team acted for the selling shareholders of First 4 Safety Limited on the sale of the company to Amtivo Group, in a deal which was completed on 14 March.

Founded in 2005, First 4 Safety Limited is a leading provider of online health and safety training courses, supplying IOSH approved training to workplaces across the UK. Their acquisition by Amtivo, providers of accredited certification, training and technology, represents the group’s move to grow and expand their existing portfolio.

The team was led by James Lyons, Director in the Corporate and Commercial department at Lawrence Stephens, who worked alongside the team from First 4 Safety and their advisers Moore Kingston Smith to successfully negotiate the sale of the company on behalf of its shareholders.

James Lyons commented: “It was a pleasure to work alongside First 4 Safety on this deal, and we were delighted to negotiate the sale swiftly and efficiently. Acting on behalf of shareholders Tom Hoey and John Pillinger, we managed to navigate the various complexities and ensure that the deal was a success for both First 4 Safety and Amtivo.”

Tom Hoey commented: “James and the team at Lawrence Stephens provided world-class advice throughout this process, and their hard work and dedication led to a successful and efficient sale – their advice was invaluable in completing this deal.”

Director James Lyons examines the Dignity PLC takeover deal, and discusses the implications of this for the mergers and acquisitions market and the power of shareholders.

James’ article was published in Law360, 9 February 2023, and can be found here.

Before many bankers’ New Year’s Eve hangovers had even cleared, UK plc was given a rude awakening by the first British takeover approach of 2023. A consortium led by insurance tycoon Sir Peter Wood made an offer for funeral provider Dignity, which was immediately recommended to shareholders by the company’s management, bringing to a swift end Dignity’s near-20-year listing on London’s stock exchange.

While early investors were well-rewarded by the meteoric rise in Dignity’s share price, recent years have been less kind to holders of the stock, with the company’s value at the time of Wood’s approach a mere fifth of its 2016 peak. Steeply rising costs had hit the company hard of late, and the markets had been even quicker to punish the share price on the way down as they had been to reward it on the way up.

With no imminent change in market sentiment in sight, not least after long-running, bruising battles with activist investors agitating for change, management clearly saw little runway in maintaining its stock market listing. Wood and his backers offered a way for the board to attempt to turn the ship around and return to long-term growth and profitability, especially given all of the funds earmarked for investment by the consortium.

Dignity’s public-to-private path is one well-trodden down the years, and the companies opting to change course so drastically are not only those down on their luck. While Dignity had been on a downward spiral for over half a decade, plenty of firms riding high also prefer to go private as a way to maximise company growth and shareholder returns.

While there is a clear benefit to firms seeking investment to do so via IPO (Initial Public Offering) and listing on the stock exchange, over time there can often seem ever-decreasing benefit to remaining a public company. The vagaries of the stock market, the capricious nature of investors, and general economic volatility can all weigh heavily on a company’s share price, piling pressure on management to deliver short-term results ahead of concentrating on longer-term goals, simply to buoy the stock price.

Such measures may be entirely at odds with managements’ view of the company’s best interests in the longer term, and result in counter-productive outcomes for staff and shareholders alike. Yet many boards nonetheless end up bowing to the demands of vociferous investors, whose voices nowadays are amplified even further by instant communication and ubiquitous social media platforms to air their criticism.

Such fear of rebuke, especially for boards of mid-to-small cap companies, has inverted reality to the point that they themselves believe that the share price dictates a company’s fortunes rather than the other way around. Share prices are by definition a reflection of investors’ attitude to a particular stock, rather than a guide to how well the company is performing or will perform in the future. Management should always ask themselves what decisions they would make if their company was private and thus there was no share price to worry about, rather than feel forced to merely react to others’ reactions to the current stock value.

If the answer to the above is that they feel compelled to make certain decisions in the short term to appease shareholders that may go against their better judgment for the company’s longer term future, then there is clearly scope for considering whether a public listing is worth maintaining at all. What may have once seemed appealing as a means to access institutional investment, create share liquidity and garner prestige by having a stock market presence at the start of the company’s journey may at a later stage become the very albatross round its neck that holds it back from future development and growth.

As well as the time and money spent debating and placating disgruntled investors in times of distress, management of public companies have to shoulder the day-to-day burden of compliance with the demands of market regulation and listing rules in order to maintain their firm’s listing. Having to report results on a quarterly or half-yearly basis and constantly update the market on any significant new developments in the business is a costly exercise, and also has the effect of exposing the company to regular parsing, analysis and micro-management by exactly the type of aforementioned investors who may forego long-term company growth in favour of myopic, short-term share price flips.

Freedom from such enforced transparency can be a boon for many companies, allowing them to carry out corporate restructuring and M+A activity far from the madding crowd of investors, analysts and commentators alike. Management can thus focus on a longer-term strategic outlook, including staff retention and rewards.

However, whilst there are benefits to privacy there are also inherent potential pitfalls. The removal of market compliance and reporting requirements allows more scope for any managerial misdeeds to go unchecked, and thus the lack of public scrutiny needs to be replaced by solid corporate governance and strong reliance on watertight auditors and robust legal representation.

At the same time, if the only way for a public company to secure a private takeover is to become saddled with significant debt to help service the financing of the transaction, as is the case in many such buyouts, caution must be applied when judging how much extra financial burden the company is sufficiently equipped to take on. Leveraged buyouts of public companies have often proved a recipe for disaster in recent years, especially in cases where new owners are seen as using the purchased company as either a means to strip assets or siphon cash from the business, at the expense of long-term growth and success.

As such, custodians of a company have a keen duty to all stakeholders, not least the workforce, to ensure that any potential suitors are genuinely well-intentioned, rather than a wolf in sheep’s clothing.

2023 finds UK plc still reeling from the twin economic blows of the pandemic and the war in Ukraine, both of which have had major consequences across all sectors of the stock market, and which have left countless firms teetering on the brink of collapse. The uncertainty which abounds provides clement conditions for pairing up between private equity and public entities, and M+A activity is likely to steadily increase over the year ahead, as initially evidenced by the Dignity takeover so early in the first quarter. Given the parlous state of the global economy, it is understandable that many boards feel panicked into action to restore shareholder value, but it is important that they avoid rash, rushed decisions for their companies’ futures. Often, the private arena offers a calmer, more rational setting for strategizing for the long-term than the pressure cooker environment of day-to-day traded markets, and as such should be seen as a viable option for many companies who previously may not have given such relocation a second thought.

Director James Lyons comments on Immotion Group’s £25 million to offload its location-based entertainment business, and the impact this has on shareholder value.

James’ comments were published in Law360, 02 February 2023, and can be read here.

“This is a good example of management seeking to balance the creation of shareholder value in both the short term and the long term, and of the importance of being proactive and nimble in the current economic climate to meet the demands of the business and its shareholders.

“The sale of the LBE business enables Immotion to deliver an immediate return to shareholders in excess of the current share price, whilst the company’s new sole focus on the HBE business together with the further capital at its disposal helps it to solidify the opportunity to deliver enhanced long term shareholder value in a growing sector.”