Tag: growth capital

HNH Secures £2.7m Growth Capital Investment for Quorum Cyber

Posted on by Rory Moynagh

HNH’s Scottish team uses its expertise to support Edinburgh cyber security company

Despite challenging economic conditions, boutique corporate finance specialists HNH have helped Quorum Cyber Security Limited secure growth capital investment to scale its business internationally.

Led by HNH director Neal Allen, the Scottish arm of the Belfast-based multi-disciplinary financial advisory firm secured the £2.7m investment from Maven Capital Partners through its VCTs, alongside the Scottish Investment Bank, which will allow the Edinburgh-headquartered cyber security and data confidence services company to scale up.

In a sign of the resilience of the Scottish tech sector and the appetite for investment in ambitious Scottish businesses, the growth capital deal was instigated by Quorum Cyber’s managing director Federico Charosky, who has a 40% stake in the business.

With a turnover of £2.7m and a team of 25 operating from Edinburgh, Quorum Cyber provides a professional and managed security services for UK and international clients including a fully managed detect and response capability via the company’s Microsoft Azure Sentinel Security Operations Centre (SOC). Charosky will use the growth capital to further scale the business, investing in sales and marketing resource, as well as product innovation to ensure clients can confidentially operate within an increasingly hostile cybersecurity environment.

Allen and the HNH team, which specialises in advising SMEs and entrepreneurs on M&A and growth capital activity, spent several months working with Quorum Cyber to secure the most appropriate investment solution. Having identified several potential investors among its extensive network, HNH secured the investment from Maven Capital, one of the UK’s most active private equity houses.

Allen, director – deal advisory at HNH, said: “While Covid-19 and Brexit have created a challenging financial climate, this growth capital investment demonstrates that there is appetite for growth and investment in Scottish business. It was very encouraging that there was a lot of interest among Scottish based private equity/venture capital funds and we’re delighted to have facilitated this for Quorum Cyber. The team at Maven Capital Partners led by David Millroy were very receptive from the start and we know that Maven is the right home for this business as it continues to grow its client base around the world.”

Charosky said: “Working with HNH and Maven to create the deal has been a fantastic experience. This deal will enable Quorum Cyber to continue growing in a sustainable way, ensuring we continue to exceed customer expectations, while protecting the amazing culture we’ve created.”

Millroy, a partner at Maven Capital Partners, said: “We are delighted to be leading the investment in Quorum Cyber and look forward to being part of its growth in the years to come.  The senior team have already created a strong business and there is significant opportunity to scale operations globally, with further expansion already underway in the Middle East, Australia, South Korea, and North America.”

The Edinburgh office of HNH opened in April 2019. In March this year, HNH’s Edinburgh team secured a £30 million asset-based lending package for The GlenAllachie Distillers Co from Clydesdale Bank. Other clients have been drawn from food and drink, manufacturing, building products, business services and transport sectors.

MBM Commercial and Chiene + Tait LLP provided legal and tax advice respectively to Quorum

Shortlists revealed for NI Dealmakers Awards

Posted on by Rory Moynagh

HNH features prominently in the 2019 Northern Ireland Dealmakers Awards shortlists.

We have been shortlisted in the Corporate Finance Team of the Year category. Craig Holmes features in the Dealmaker of the Year list. While, we were involved in a number of deals which have also gained prominence – the sale of fscom’s KYC Pro product to PWC, funding for ISL Waste Management Ltd (both feature in Deal of the Year – below £2.5m) and the acquisition of Alumasc Facades by Kilwaughter (Deal of the Year £2.5 – £10m).

HNH Director Richard Moorehead is proud of his team:

“2018 was a fantastic year for HNH’s CF team, which nearly doubled in size from five to nine team members over the course of the year. As well as giving us crucial extra bandwidth, our targeted recruitment has added expertise in financial modelling, transaction services and debt advisory,” he said.

“We completed 15 transactions during 2018, covering a wide range of sectors and transaction types. Having three of our deals (Kilwaughter, FSCom and ISL) shortlisted for deal of the year is testament to the strength of our team and their hard work and dedication.

“2019 has continued in the same vein as 2018.  At the end of last month, we completed the sale of the leading independent foodservice business, Foodco, to Henderson Foodservice and have another four or five deals scheduled to complete before the end of this quarter. ”

The annual NI Dealmakers Awards aim to recognise the high quality professional advisory firms and funders in Northern Ireland and some of the best deals in which they have been involved in over the previous calendar year. All winners will be revealed at the gala dinner event set to take place at the Stormont Hotel in Belfast on 14 March 2019.

Should I stay or should I go?

Posted on by Rory Moynagh

The forthcoming Christmas break is, for many business people, the one time of year they can enjoy a proper break, away from the constant interruptions of emails and deadlines, and spend some quality time with friends and family, reflecting on the year just passed and the challenges that lie ahead.

This period of reflection is often the catalyst for change and we frequently find ourselves spending much of January meeting prospective clients who have expressed a desire to sell their business.

There are a number of valid reasons why someone may come to this decision including:

  • I have taken the business as far as I can.
  • My attitude to risk has changed.
  • The economy/competition/technology is a threat to me.
  • My team doesn’t have the ability to develop the business.
  • I want to capitalise on entrepreneur’s relief while it is still available.
  • Multiples are strong in my sector and I want to get out at or near the top of the market.
  • I had an approach it has got me thinking.
  • I can’t work with my co-shareholders anymore and we need to go our separate ways.
  • Personal reasons such as a health scare or simply a desire to spend more time with family.

A key part of our process is to look beyond the headline reason for the decision and understand the underlying motivation.

We have bad days, or weeks, when work isn’t going well, the pressure is building and it just isn’t enjoyable.

However, for most business owners the decision to sell is a once or twice in a lifetime moment, so it is crucially important that proper consideration is given to the following thoughts:

  • Why now? What has changed in the business or personal circumstances?
  • What position is the business in? Does it need investment, new people, new systems, etc.?
  • What are the alternatives? Can something be changed that would take the pressure off and make work enjoyable again?
  • What could someone else do with the business? Are you selling an opportunity or a risk?
  • What will you do next? Even if the sale of a business yields a life changing amount of money, many sellers soon find themselves bored and seeking a new challenge.

It may sound counter-intuitive coming from a firm that ultimately gets paid when people sell their business, but we would much rather potential clients wait and sell for the right reasons, at the right time, rather than rush into a process which can be time-consuming, emotionally draining and indeed costly.

There is a high correlation between poor planning and aborted transactions; a failed process can linger over a business for years, putting doubt in the minds of employees, investors and potential acquirers.

Once the underlying reasons for wanting to sell are understood, only then should you look at the options, which may include:

  • A trade sale i.e. to another company.
  • A partial exit, achieved through selling a stake in the business to an investor, which would be a private equity fund, HNWI, family office, etc.
  • MBO, MBI or BIMBO.
  • Putting in place an exit readiness plan for a sale in the medium-term.

We will address these options in the weeks ahead, but in the meantime, here’s a link to our first blog in this series, ‘Why is succession planning crucial for your business?‘ .