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Case study: Total Drain Group

How we launched a divestment process during a global pandemic

Overview

After being engaged by Total Drain Group in January 2020, Nash Advisory assessed the strategic options available to TDG shareholders. With limited impact from COVID-19 on the business, a decision was made to launch a competitive investment process in April 2020.


Numerous indicative bids from a range of private equity firms were received in early May 2020, with second round bids being received in late May 2020. Due diligence was completed within four weeks of signing a term sheet, and a binding investment agreement was executed in July. Transaction completion occurred in late August once FIRB approval was granted.   

The existing shareholders of TDG will continue to operate the business with the assistance of Marcus Darville and Victor Ha from Quadrant who will join the Board of TDG at transaction completion .

Industry

Waste and industrial

Key outcomes

  • Strong preparation over months to ensure a smooth process
  • Open communication to understand likely outcomes
  • Competitive tension that made transaction terms more favourable

The situation

Total Drain Group (TDG) engaged Nash Advisory in January 2020 to run a process to facilitate a partial divestment of the business as well as identifying a strategic partner to drive accelerated growth over the next 3 – 5 years.


How we got results

1

Putting a plan together

In preparation for a partial divestment process, Nash Advisory created a comprehensive Information Memorandum for the business to accurately describe the exceptional growth of TDG in the last three years as well as presenting the future growth potential in a large and growing market. 

Nash Advisory also created a detailed four year three-way financial model, which outlined TDG’s financial forecast and the required investment in expanding the vehicle fleet.

2

Taking economic conditions into account

Prior to launching a divestment process TDG and Nash Advisory had to navigate the challenges of a highly volatile investment environment that had eventuated from the shock of COVID-19. Whilst the TDG business had been relatively unaffected by COVID-19, a timely decision needed to be made as to whether value expectations could be achieved in the COVID-19 environment. After extensive consultation with a wide range of investors and market participants a decision was made in April 2020 to launch a divestment process as market feedback suggested that there was still strong investor appetite for high quality growth assets.

3

Attracting numerous offers to enhance outcomes

A substantially improved value outcome was achieved for TDG due to a high level of competitive tension between bidders in the process. Competitive tension allowed Nash Advisory to push for an increase in price and more favourable transaction terms.

4

Due diligence

An extensive diligence process spanning financial, legal, operational, and environmental categories was conducted in June/July 2020 with Nash Advisory acting as the lead advisor in the process. Nash Advisory acting for the company managed a buy-side diligence team of over 80 people, with more than 600 detailed questions via an Ansarada dataroom.

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"I cannot overemphasize the importance of planning and preparation for any transaction. In this transaction the buyer had over 80 individuals assisting them with diligence and the transaction."
Sean O'Neill
Sean O'Neill
Managing Director

The people involved

Timeline of the sale

January 2020

Nash Advisory engaged to assess strategic options for TDG

February/March 2020

A comprehensive Information Memorandum and a detailed, bottom up thee-way model is built to forecast the monthly performance of TDG out to FY23

April 2020

The divestment process was launched with Nash Advisory managing the Q&A process, site visits and management meetings

May 2020

Numerous indicative offers are received for TDG. Nash Advisory negotiates with participating bidders in order to improve value, terms and determine the best fit strategic investor

June/July 2020

An extensive diligence process is conducted focusing on all aspects of the TDG business. Nash Advisory acts as the lead advisor in diligence, managing the data room and working with legal (Kain Lawyers) and tax advisors (PwC)

July/August 2020

Share sale contract is executed in July with completion in August 2020

Services offered

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