Convex Capital buyout puts growth ambitions back on agenda
Manchester-based sell-side advisory firm Convex has been acquired by its leadership team in a strategic move which the team claim is a return to its entrepreneurial roots.
The management of Convex, led by James Edge, Isaac Asamoah, Tom Campbell, Indy Singh and Olly Hennessy, acquired the business from RBG Holdings plc last week (28th March) through a joint venture with Knights Group Holdings plc, the regional professional services business.
Knights has provided £2.55m of debt and equity financing to Convex, funded from its existing cash resources.
James Edge, Managing Partner of Convex, said: “We have an exceptionally talented team and strong growth ambitions which we had not been able to fulfil under previous ownership. By management taking control of the business, we are delighted Convex is back in the hands of entrepreneurs with a passion to continue providing UK entrepreneurs best in class M&A advice.”
The management team paid £2.6 million, with an initial cash payment of £2.0 million paid on completion. There is also an earn out agreement whereby RBG will receive 38% of any gross fees received if four existing deals currently on the books manage to complete. The payments will be up to a maximum of £600,000 in cash.
Convex Capital had been acquired by the listed legal services group RBG in 2019 in a move into the wider professional services sector; the disposal will result in a non-cash loss of £13.5 million, according to RBG.
Knights’ participation in the new joint venture is in line with its strategy to diversify the range of professional services available to clients by expanding its M&A legal services into corporate finance. In a statement to the stock market on 4 April Knights’ said they saw “substantial professional synergies” driving what they describe as a joint venture to provide Convex clients with access to Knights’ legal M&A and private wealth services.
David Beech, CEO of Knights, commented: “Convex has built a reputation as one of the leading sell-side only M&A practices in the UK and the cultural fit with its young, dynamic and hungry management team is strong, creating a mutually beneficial symbiotic relationship for Knights and Convex.”
Convex describes itself as “dedicated to supporting vendors of entrepreneur-led businesses in maximising their equity value through sales to global strategic acquirers”.
Founded in 2010, Convex has advised on deals valued at over £3bn in aggregate and claims it is “renowned for creating unrivalled sale outcomes for its owner-managed clients”
Recent deals include the recent sales of Gorilla Accounting to private equity backed accountancy group Azets, Thoroughbred Remedies Manufacturing to Equine Care Group (Belgium) and Metallisation to Kymera (USA).
The 11 strong Convex team will be based at Two St Peter’s Square, Manchester, and cover the UK market with an existing strong pipeline of deals across software, tech-enabled services, education, professional services, and healthcare sectors. The broad national presence of Knights in already established markets for Convex further enhances growth potential.
