Logistics Services
Description: Software Company – Warehouse management systems
Project: Raising finance for MBO
Finance raised: MBO financed by parent company
Client Requirements
System Lynx Ltd is an established Software House specialising in Warehouse Management systems with accredited expertise in Bonded warehouses. In 1999, the company was acquired by a larger company specialising in materials management. The merger was not profitable for both companies and the parent company agreed to an MBO by System Lynx’s Management.
The company applied to a regional Venture Capital Fund for finance for acquisition of assets via an MBO and for funding business operations. The investor indicated that they would consider supporting the MBO subject to confirmation of market demand. The support has been requested as part of their due diligence process to ensure the project is investment ready.
Project Approach
The company was referred to Genesis Consulting by the investor in order to determine the demand for the products and services of System Lynx, Genesis performed the following activities:
- A review of the UK market using published sources available in the public domain to undertake a market overview and situational analysis and to determine the market structure and the key market trends.
- A Competitor Analysis to assess the major players in the Industry. Both direct and indirect competitors were identified in terms of their core products and services.
- A telephone survey of their existing customers to understand the main problems/difficulties that customers face within the identified markets targets.
- The above findings were presented in the form of a market report.
Outcome and Client Benefits
Based on the results of our support, the parent company financed the MBO and the need for an external investor was negated.