Case Study
The better the question The better the answer The better the world works
Case Study

Case study: How a Nordic SaaS player unlocked potential in a global lockdown

A bold strategy and deep, multi-disciplined M&A experience turned “it can’t be done” into a sale that facilitated outstanding outcomes.

Fishing boats in fjord, Austnesfjorden, Norway
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The better the question

How can M&A strategy help regional business grow in a global crisis?

An initial approach from an acquiror turned into two deals to complete a reverse merger, and all during a global pandemic.

Consignor, founded in 1997 by Peter Thomsen, had developed to become a leading Nordic Software as a Service (SaaS) player, offering multi-carrier parcel management systems to e-commerce businesses. However, in late 2019 Peter realized that the business lacked resources to take advantage of a significant developing global growth opportunity.

An approach from a rival looked attractive, but Thomsen wasn’t ready to retire and leave the business. He had bigger ambitions, so he reached out to EY teams for advice.

“I saw a compelling strategic rationale in combining Consignor with my competitor and become a leading global force,” commented Peter Thomsen, CEO, Consignor. “It was going to take time to extract the benefits of the combination, so it was important for me to remain actively involved with the management of the business as much as possible. I was also worried about teaming up with a partner who had a shorter investment horizon than mine. EY advised me to ‘take control of the situation’ by finding the right investor to back Consignor’s growth ambitions, both organic and inorganic.”

EY and EY-Parthenon teams designed and began executing on a transaction process that would meet Peter Thomsen’s ambitions to find a financial backer for Consignor that would help maximize its value creation potential, while participating proactively in the market consolidation. And then the global pandemic was declared.

Yellow truck crossing bridge by waterfall in norway
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The better the answer

A bold strategy, deep sector knowledge, and broad M&A capabilities were key

By being bold and innovative, EY teams transformed the bid process to create a smooth and engaging experience for seller and buyer alike.

EY teams were selected to support the whole of the sell-side mandate from strategy through to execution. The organization’s broad portfolio of experienced teams, including financial and tax, commercial, and technology professionals, in addition to the strength of their strategy practice of EY-Parthenon, were brought in to complete the full suite of due diligence requirements.

In March 2020, and as the World Health Organization declared a global pandemic, the preparation phase of EY process to find a PE buyer who could help Consignor secure their capital position and aid them to gain control to grow the business on their terms was well underway. Buyer interactions on the other hand had barely begun.

By this time the COVID-19 pandemic had gone global and the world had shut down. M&A activity ceased, debt markets shut down temporarily and economic activity dived globally. Despite this backdrop of intense uncertainty, EY teams and the leadership team at Consignor together took the view that due to Consignor’s exposure to the level of e-commerce activity that was surging during lockdown, revenues would hold up and the decision was made to move forward with the deal.

EY teams advised me to “take control of the situation” by finding the right investor to back Consignor’s growth ambitions.
Peter Thomsen
CEO, Consignor

Many may have challenged whether this was the right time to sell a valuable tech company, but Peter and the EY teams took a bold view that, as many other deals were put on ice, they’d be one of the only deals in the market. As such, they expected to capture a disproportionate level of attention among the target investor group.

Lockdown measures globally meant that there could be no in-person meetings or presentations to potential bidders — a major obstacle surely. But EY teams used this to create impactful, innovative video materials that accelerated and simplified the bidding process. Instead of the usual round of face-to-face presentations with interested parties, EY teams worked with the CEO to create a slick recording of the company presentation, that incorporated answers to pre-submitted questions. Once created the same presentation could be shared multiple times. “While we believed in our approach, because this had never been done before, we couldn’t be sure that we could attract commitment from a buyer without actually meeting the CEO,” says Eric Sanschagrin, EY EMEIA Head of Technology Transaction Advisory.

Speed and energy were critical. EY teams’ ability to draw on the wider organization’s capabilities, with its complementary services, meant it could perform the widest range of due diligence (financial, tax, commercial, technology) for its client at an expedited pace. Each team was project-managed and integrated to reduce the burden on the founder.

In the end the successful bidder, Francisco Partners, only required seven days of confirmatory due diligence before they signed. This happened just four months after EY teams were hired by Consignor, on a valuation of over NOK1 billion which was equivalent to EBITDA and revenue multiples at the top end of the range for similar transactions completed prior to the COVID-19 crisis. Peter reinvested a significant portion of the sale proceeds alongside Francisco Partners. The world was still in lockdown when the deal was inked.

The Fredvang Bridges in the setting sun, Lofoten, Norway
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The better the world works

Intelligent M&A can transform the market, creating value for all

Not only did this deal win value for the client; it also smoothed the way for market consolidation across tech players in the Nordics.

This story doesn’t end with the successful sale of Consignor to a recognized leading technology PE firm. Within 6 months of completing the investment in Consignor, a merger was agreed between Consignor and its Swedish competitor Unifaun. This completed the story, achieving Peter Thomsen’s original objective of playing a proactive role in consolidating the sector and repositioning Consignor from a leading regional player to a global market leader. And who would lead the new combined entity as CEO? Consignor’s Peter Thomsen.

This story has a number of lessons.

  • First, deep knowledge and understanding of the market is an invaluable aid to a seller who benefits from a strategy that puts that market insight to work.
  • Second, never say “it can’t be done.” Courage to complete a major deal in the face of the pandemic won enormous value for the client.
  • Third, having a global, highly integrated organization with deep sector knowledge at your side to not only advise on appropriate strategic options, but who can help implement them, supports a transaction to be completed with speed and efficiency. For an owner-CEO, who has to continue running a business while selling it, this is a major benefit.