In 2019 our corporate team facilitated the sale of Bargate Homes to housing association, VIVID; a ground-breaking transaction which saw a highly regulated social housing provider buying a very entrepreneurial, for profit, trading company to further its own ambitious objective to develop 17,000 more homes in the south over the next 10 years – this ambition being driven by their determination to give as many people as possible the greatest chance of having a place to call home.
Bargate Homes is a medium sized house-building business based in the beautiful Hampshire countryside. Partner Amanda Brockwell has worked with Managing Director of Bargate Homes, Gerard Price, for over 112 years. We interviewed both Gerard and Amanda to find out more about the deal itself, and what makes a transaction successful for a client.
Tell us more about you and your history of working with Amanda
Gerard: I’ve had quite an interesting corporate history involving being part of the quote to plc and buying and selling businesses.I first met Amanda about 12 years ago when we had some shareholder agreements; Bargate was going to be a new business, and we had new ways of running a house building business which was atypical. We wanted to create some interesting structures to attract the right personnel.
How did the transaction and relationship with VIVID come about?
Gerard: VIVID is a really interesting organisation. In addition to owning around 30,000 homes in the south, they have a corporate ambition to deliver 17,000 new homes over the next 10 years. Central to its vision of creating more homes and bright futures is giving more people a safe and secure place to call home. This is vital to everyone’s health and wellbeing. There continues to be a critical shortage of homes for people wanting to live in the region, which it’s doing all it can to help address. Bargate brought significant extra plots of land secured for new homes to VIVID, and it became clear early on in discussions that our expertise in land management and construction complements the skills of its team.
In deciding to sell Bargate, we sat and thought, ‘who are the right custodians for taking the business going forward?’ We’ve got a very strong management team and a great team ethic within the organisation, so we wanted to try and find somebody who would be a good long term home. We’ve absolutely found that in VIVID.
Tell us about the Paris Smith service and why Amanda was the right person to work with
Gerard: Putting together your professional team is always a challenge because you are not just looking for someone you like and someone who is skilled, you want someone who can add that extra mix into your team so that when you’re all sitting at the table, you feel the right people are alongside you. Over the years having worked with major London law firms and law firms that are typically used by plc’s, you recognise that whilst they are there charging you by the hour, they don’t have an intrinsic knowledge of your business, it’s just a process they’re going through. We now know Amanda very well, and our main reason we want her as part of our team is because she gets the reasoning behind what we’re doing. Sometimes if you feel you are all thinking in the same way, it makes the preparation of paperwork and the end result both simpler, and a more pleasant experience.
However, culturally there is a big difference between an entrepreneurially driven business and a regulated housing association, and this came up within the transaction. They were using a city based firm and wanted to ask a lot more questions than we had anticipated because so much of what we do is done on trust. Amanda helped us to pick our battles, so to speak, in these situations.
So why was this transaction unique?
Amanda: The really interesting thing about this transaction was the differences between the buyer and seller. It’s fairly ground-breaking to see a highly regulated social housing provider buying a very entrepreneurial, for profit trading company to further its own objectives. That was relatively ground-breaking stuff.
And what makes a transaction successful?
Amanda: The key to a successful transaction is the buyer and seller making sure culturally they want to move in the same direction. Progressing the transaction is all about team work, not just within Paris Smith, but also with your clients and management board. You all need to be leaning in the same direction; understanding each other and understanding what matters and what doesn’t matter, pushing on things that are really important to the client, and knowing when to stop fighting too.
The transaction process is an intense one, you have to pack a lot into a short time frame. This means communication is key within both the team at Paris Smith, between Paris Smith and Bargate, and with the other professional advisors, to make sure you don’t drop a ball, and that everyone is clear, comfortable and confident that its going well.
And what was it that made this particular transaction a success?
Amanda: There are often lots of things that influence how well a transaction goes, but one of the crucial factors is now well a company organises itself in the lead up to sale. The advantage of working with Bargate from the beginning, is that I have seen, throughout its history, Bargate has been excellent at keeping things clean and tidy, had good audit trails and complied with whatever standards it needs to. This meant the due diligence process was easy, and the buyer could look at them and say, ‘this is a company that performs with integrity, and everything is done with quality’.
Gerard: For me, looking back on the process of selling Bargate, what’s really rewarding is seeing lots of really early decisions coming to fruition; anything from people being able to take equity positions or people being part of the entrepreneurial growth of the business. Also in our case we were party to additional investment so when we were able to find a third party, Amanda produced the paperwork for us and we were able to attract the right investment. Then when it came time to sell the business, all that original paperwork worked. The ideas on paper turned into successful investment, and the Bargate team were incredibly well looked after.
Our long term working relationship with Amanda was really important here, and one of the reasons the whole process worked for everyone.
This year teams across multiple departments assisted Hillier Nurseries with the acquisition of five garden centres across the country; this was a pioneering transaction which saw the family owned business grow their portfolio to 17 sites altogether. We sat down with Director of Property George Hillier, to talk more about this unique transaction, and how Paris Smith navigated this complex deal.
Read on for the full transcript or watch the video of the interview opposite.
George: We are a family owned business and I’m part of the 5th generation. We began in 1864 with our founder, Edmund in North Walls in Winchester. We have a business which is focused on horticulture and has three key elements. We have the retail side which is our garden centres, we have the growing side for the trees, and the wholesale production, and we produce plants to sell in our retail garden centres.
George: As a family business, when we are looking for partners to work with, we are looking for organisations that have similar values to ours, and we certainly found that in Paris Smith. Buying the five sites was a complex process and was multi-faceted; it involved several organisations. With the flow of information being absolutely critical, we were looking for someone that would roll up their sleeves, get stuck in, and critically, work well with all of the organisations that were helping us to achieve our goals.
George: It was announced at the Chelsea Flower Show by Wyevale that they were going to be selling their garden centres, of which there were 156. It was very unusual to have so many garden centres come up for sale individually. There was an awful lot of work for us to do, certainly in the initial stages and through the process. We needed to identify which centres we were really interested in. For us as a business it was such a great opportunity to expand, as it sat perfectly with our strategic plan and our financial targets. There was lots of information to get through, and lots of potential pitfalls, so what we really needed was some excellent legal advice and a partner to help us through that purchasing process.
Amanda: Unusually, this deal involved a competitive electronic auction so all the sites were put up for sale, and Hillier needed to decide which ones they wanted to buy. Then it was up to the project team at Paris Smith who worked closely with the financial advisors and tax advisors to whittle down the number of available sites to those which fitted within Hillier’s criteria. We needed to gather as much information as possible to provide Hillier with a list of the good, the bad and the indifferent, so that they could make an informed choice about the sites they wanted to bid for and how much they wanted to bid. It was high pressure because it was a highly competitive auction; we had tight timescales we had to comply with to make sure we didn’t lose out to other competing bids. It was an exciting time where we worked as part of a larger team with other Hillier’s professional advisors to get a great result. And in the middle of all this, when the management were making these huge commercial decisions, they were still exhibiting at Chelsea Flower Show and winning a gold medal, so hats off to them!
George: For us we were looking for a partner that could help us through what was going to be an unusual and unique set of circumstances. We had done some work with Paris Smith in the past, and I knew Rachel Saint in Property and Commercial Business Director Mike Donaldson so it seemed a natural fit for us. We engaged Paris Smith and they came on board, helping us to understand a lot of the complexities of a deal like this; it was a unique deal. One of the major issues we faced was that the supply of information was quite slow and came through at an inconsistent rate, which made it difficult, both in terms of the legal due diligence that we had to do and also the commercial. What we found in Paris Smith was that they had the capacity to help across so many levels all at the same time when we were looking at purchasing five individual sites in one go. One of the things I really valued about the support that we got from Paris Smith was the fact that we were able to get information when we needed in order to progress with the transaction.
George: The key personnel we work with from Paris Smith are Amanda Brockwell from Corporate and Rachel Saint in Property. Their knowledge and experience enabled this whole process to happen and they were able to deliver the information we needed in a timely manner, which was critical to the whole process and the transaction going through as successfully as it did.
Amanda: A large team was essential for this transaction. This was critical on the property front; Rachel Saint had at least half a dozen people working on the property elements, I project managed the team who dealt with all the commercial agreements, data protection, and our employment team who were involved in dealing with the transfer of staff under the TUPE regulations. A lot of resource was needed on relatively short notice.
Amanda: What we had to bear in mind with this transaction was the bigger picture, and understand the seller’s perspective. The seller was trying to divest itself of over 150 sites; a large number compared to the five that Hillier were acquiring. Therefore, what we really had to do was focus on the right battles and choose a small number of critical points within negotiations. This was important in getting the deal over the line.
George: This process has been really exciting, and something we’ve not taken on before. We are a small to medium sized enterprise, family run business, so for us to have expanded our retail department as much as we have with the purchase and acquisition of these five new sites has been just brilliant; a once in a lifetime opportunity. Its one that actually we could have easily missed out on if we hadn’t had the right team in place. Its exciting for us as a business as the acquisition sits very well with our financial targets, as well as our mission, vision and values moving forwards. In terms of our partnership with Paris Smith, they were central to us getting the transaction over the line.
Now that the transaction is done and dusted, we now have the job of integrating the five new centres into our estate, which is so far going really well. Its been tough at times but its working well. Its also not the end of the relationship with Paris Smith; day to day I pick up the phone to them just to check things over, getting support to make sure that what we are doing is correct. For us the deal has been a huge step outside of our comfort zone, so we needed the professional support to make sure that we avoided pitfalls, and we definitely got that.
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