Founded in 2004, Moorhouse is an award winning project and programme management advisory firm that fast built a reputation for exceptional delivery to clients in the public and private sectors. The founder, Dom Moorhouse, had his eye on growth and eventual sale from the get go, involving Equiteq in key management team decisions from the start. Dom led the company to rapid success and engaged Equiteq to help him prepare for sale. Moorhouse sold to BT in 2008, 1 year ahead of plan, for the premium price of £19m, and was the only BT subsidiary to ever retain its own brand and a degree of autonomy.
The client’s situation
Moorhouse had bold ambitions from the start, wanting to sell within 5 years of start-up. They engaged Equiteq to help them identify the best way of achieving this and made much expert internal resource available to spend quality time on growing the business profitably in preparation for sale. Their focus, energy and project management experience was exactly what was needed to get the business ready for sale and proved vital in helping to clinch a buyer with whom they had a real market synergy.
Moorhouse identified the need to improve in specific areas and used Equiteq’s expertise and advice to help them introduce best practice in driving sales and profit growth, quality of fee income, improving intellectual property, and formalising sales and marketing processes among others.
A detailed and clear improvement plan was put in place to tackle each of these areas and a project team was set up to lead the activities. Planning and monitoring was rigorous. Time was set aside to allow leaders to work on the business as well as in it, and a structured approach to growth was drawn up and implemented alongside this.
The meticulous preparation paid off and when client BT showed an interest in buying Moorhouse’s project management expertise to enhance its services, Moorhouse was able to present itself as an ideal fit for the buyer and as a business with very attractive growth prospects. Moorhouse had also demonstrated a track record of accurately predicting and achieving their revenue forecasts, which meant that BT saw them as a ‘low risk’ purchase, which pushed up the value of the company. The timing of the interest in Moorhouse was 1 year ahead of their original planned sale process but Equiteq advised that the market for a sale was right and that there was risk in delaying, a view that was borne out with the subsequent Global Financial Crisis.
At the end of Equiteq’s involvement the business had almost tripled in size, achieved a double-digit EBIT multiple and sold to BT, a client and a UK FTSE 100 company.
How did Equiteq deliver value to the client?
Moorhouse Consulting made rapid progress over a 3 year period in the Equity Growth Wheel, with a specific focus on Sales and Profit Growth, Market Proposition, Intellectual Property and Management Quality
Equiteq – via a role on the Moorhouse board - contributed to the:
- Tripling in size in 3 years, growing revenue from £2.1m to £8.5m
- Profit growth from £0.5m – £2m
- The EBIT value of the firm reaching close to 10x
Equiteq led the sale to BT, a UK FTSE 100 buyer who saw Moorhouse’s services of premium value for their company, and were therefore willing to pay a top price of just under £20m
A 3 year ‘earn out’ period was agreed which included succession planning and future growth – all of which has been achieved and exceeded the buyer’s expectations