Situation
Funded by the UK Government, Bath Information and Data Services (BIDS) was established in 1991 by the University of Bath to provide scientific, technical and medical research resources online to the UK academic community. BIDS grew rapidly and became the leading online distributor of published research journals and simultaneously developed a range of services to assist publishers to distribute their content online.
In order for BIDS to continue to achieve its commercial potential, the University of Bath decided that new capital and a new management team were required. The University of Bath evaluated several options for the privatisation of BIDS, and concluded that the most attractive alternative was to sell BIDS to ingenta.
Approach
Together with ingenta management, ARC Associates developed the business plan for BIDS, wrote the information memorandum and prepared presentation materials for investor discussions.
In addition, ARC Associates assisted ingenta in formulating and negotiating the structure of the acquisition of BIDS, evaluated possible funding alternatives and developed a strategy for raising the required capital to finance the acquisition and provide development working capital.
A number of possible funding sources were identified including private investors, financial investors and strategic partners. ARC executed an extensive call programme to each of these investor groups, and managed the investor presentations initial discussions.
From the initial responses, ARC Associates advised ingenta that pursuing private investors represented the most attractive financing option, balancing the pressing timetable against maximising the residual equity interest maintained by ingenta.
The Transaction
In September 1998, ARC Associates successfully raised £2m from over 20 private investors to fund the purchase of BIDS and provide the working capital to execute the business plan.