When Mike was selling his business, AutoCoding Systems, he knew he needed M&A lawyers who were up to the job. Partner Victoria Zivkovic and our corporate team helped Mike turn pressure into confidence while successfully completing the £12.5m deal.
Mike and his Financial Director, John, went through a rigorous interview process before choosing Irwin Mitchell as the lawyers that were right for them. They had existing relationships with several other firms, but Mike felt they couldn’t match the experience and depth of resources that we brought to the table.
Selling to a big American buyer added an extra layer of complexity and mountains of due diligence to work through. That made it all the more vital for Mike to get the right people on board to get the deal over the line.
We helped Mike get the result he wanted while maintaining an amicable relationship with the buyer, JBT. We continue to advise Autocoding Systems on their day-to-day legal issues as they trade around the world.
About AutoCoding Systems
Mike founded Autocoding Systems, a niche software engineering solution provider based near Runcorn, in 2005.
The company specialises in technology that automates and controls workflows for consumer product packaging lines. Specifically, Autocoding Systems help manufacturers with inspection, verification, coding, and other actions to make sure products are packed correctly and fit for purpose for the end consumer.
The company led the invention of the automation of date coding on consumer packaging, coining the phrase ‘autocoding’ along with it. They’ve also recently achieved their first patent for a unique code inspection solution called 4Sight.
80% of their customers are in the food and drink sector, but they also work with manufacturers of cosmetics, pharmaceuticals, and other consumer goods. They’re leading experts in the food and drink sector, even advising household name high street retailers on packaging coding management and verification best practices.
Thousands of packaging lines around the world use autocoding. It’s always being updated and getting better, meaning a very loyal customer base is working with advanced enterprise-level software that operates with global scale.
Growth and Success
Autocoding Systems has been Mike’s “life’s work”. It’s a profitable and viable business and has bounced back from the uncertainty of Brexit.
It also has an appetite for growth. They set up their own operations in Melbourne, Australia, and Chicago, USA. This established that they could trade their product overseas. Factories usually run 24/7 so the fact that they can reliably operate anywhere in the world is a testament to the quality of their software.
The growth and success of the company got them some acquisition and investment attention and. By 2020, Mike had four offers from buyers who wanted to either purchase or make a significant investment in Autocoding Systems.
He chose JBT because they’re also very strong in the food industry and already own many companies that manufacture machines for that sector. That would give AutoCoding Systems a global opportunity to sell their product to JBT’s other operating companies. “We’re already seeing the benefits of that synergy and that’s really exciting,” says Mike.
Choosing the Right Firm
With a deal on the table, Mike needed to find a law firm to help them get it done. The value attached to the business was very significant to Mike and his fellow shareholders - £12.5m – and he was determined to complete the transaction professionally.
“We had to find a firm that were capable of transacting the deal very quickly,” said Mike. “We knew that when you’re working with a very large public company like JBT, they would have professional lawyers to help them transact and we needed the same.”
He sat down with his FD, John, and narrowed it down to a shortlist of four or five firms that they thought were good enough. They spoke to their existing legal advisors but wanted someone with more specialist knowledge of mergers and acquisitions (M&A).
“Most medium-sized law firms would love to have a go at M&A”, said Mike, “and that’s a mistake you can make because they will not have the experience and the depth of resource that you need to get through the transaction as quickly as you need to get through it. It can’t last forever, it can’t go on, you have to get to the end as quickly as is viable.”
Mike and John chose Victoria Zivkovic from our corporate team after a one hour interview. “What we liked about her was her honesty about the size of the deal, the costs involved, and the intensity and scrutiny that comes with dealing with a large American corporation with extensive M&A experience. I also think you’ve got to have a rapport, you’ve got to have a sense of humour – Vicky’s got a sense of humour – and you want to feel confident knowing that that she’s done it before.”
The Deal
Mike and his legal team from Irwin Mitchell first met JBT in September 2020 and plan was to complete the transaction by early 2021. The scale of that task quickly became apparent.
“We started doing due diligence just before Christmas, so we needed to complete everything in about 2.5 months, and that’s a huge amount of work,” Mike explained. “Due diligence when you’re dealing with a company like JBT can be overwhelming, and you need a law firm that can push back where necessary but can also keep you and the buyer calm. You’re trying to run your business at the same time as selling your business – that’s quite a difficult thing to do!”
The deal involved almost constant negotiation and renegotiation. Mike really felt the benefit of working with a team he could trust, so he could make decisions quickly.
“You feel that you’re working with experience, so that gave us a sense of confidence. We could see that Vicky and the team were confident that they could transact to the timeline and keep everybody on board.
"I felt that whatever minor setback or minor challenge that would just naturally come through during a deal process was not going to be a problem, that the Irwin Mitchell team would deal with it.”
“It’s A Team Game”
Working with Victoria and the rest of the team at Irwin Mitchell, Mike successfully sold the business in February 2021. He was particularly impressed with the responsiveness of our support.
“There was a really good allocation of resource by Irwin Mitchell so you didn’t feel like you were competing for their headspace,” he said. “They knew that what we needed was 100% intensive support for a number of weeks or months – we were an important deal so we got a partner and we got a team and whatever we needed, we got."
The human touch made a difference too, with Victoria calling Mike and John in the evening and at weekends when she knew things were tough. “You can get pretty stressed when there are challenges. You need someone to say ‘I’ve seen that before, don’t be upset, that’s normal, this is how we deal with it, this is what we do, don’t worry.’”
Mike knew that it was important to find the right balance in negotiations because he was going to have a lasting relationship with JBT. Victoria found that balance too as we continue to work with Autocoding Systems.
“The team at AutoCoding Systems contains many long serving employees and it was particularly rewarding to able to award bonuses to many of our colleagues,” added Mike.
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