THE SITUATION:
Businesses looking to drive higher profit margins are increasingly turning to revenue management software (RMS).
Already a multi-billion-dollar industry, and projecting significant growth during the next decade, RMS enables companies to monitor real-time trends using data. When market conditions shift or consumer demand changes, those companies can adjust pricing immediately and remain competitive.
SilverTree Equity, a private equity investor that targets software, technology and technology-enabled companies, took note of the impressive business benefits and growth potential of RMS. It identified two strategically positioned companies with reputations for excellence in the sector: XTEL (part of Bain Capital portfolio company Kantar) and Step-Up RGM.
THE CHALLENGE:
With Kantar, SilverTree sought to co-invest in a new group made up of these two companies. Kantar would contribute XTEL (as a carve-out) to the new group, and SilverTree would supply the funding to purchase Step-Up.
XTEL delivers advanced software to leading manufacturers, and Step-Up is a revenue management market leader that operates in more than a dozen countries in Europe. Bringing together XTEL and Step-Up’s capabilities would provide clients with powerful, data-driven RMS featuring advanced analytics, mobile and cloud access, and industry-specific solutions.
OUR OBJECTIVE:
To help it pull off the acquisitions with co-investor Kantar, SilverTree turned to McDermott and client relationship partner Aymen Mahmoud. A cross-practice, cross-border London team rose to the challenge.
THE OUTCOME:
Working with several other law firms, and across its own offices around the globe, McDermott seamlessly managed two cross-border transactions operating on different timeframes. Through careful coordination and close communication with all stakeholders, the team aligned the deals to sign and close at the same time (to ensure that the parties had deal certainty across both transactions).
To protect SilverTree’s interests, the work involved navigating complex issues across multiple jurisdictions, including Italy, Belgium, Luxembourg, England, France and the United States. Among other endeavors, McDermott lawyers steered SilverTree through the EU legal framework for data collection and processing, negotiated bespoke equity arrangements, and fast-tracked antitrust analysis and the Italian “golden share” clearance while complying with both acquisitions’ confidentiality terms.
The work also included a corporate carve-out to separate XTEL from Kantar, along with unifying XTEL’s international management team with Step-Up’s team in one new overarching management incentive plan.
To address every implication of the deals and achieve the right business outcome for SilverTree, McDermott took on responsibilities spanning finance, M&A, private equity, employment, tax, antitrust, intellectual property and beyond.
DIG DEEPER:
Among its other advantages, the RMS market can withstand – and even benefit from – both inflationary and recessionary environments, as analyzing data and trends to forecast market conditions is essential to businesses’ revenue growth management.
Drawing on a deep bench of advisors, McDermott worked around the clock on an expedited timeframe to ensure SilverTree’s successful co-investment in the growing RMS space.
Nicholas Theuerkauf, founder and managing partner of SilverTree Equity, said: “Throughout the transaction, Aymen, Elisa and the entire McDermott corporate team were unparalleled in their advice and approach. They showcased an incredible ability to manage a large team of advisors from different jurisdictions.”
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