Cezanne, a leading UK provider for flexible HR software and services such as payroll, is trusted by thousands of HR professionals across the UK and around the world. Cezanne has customers in virtually all sectors, including finance, legal, high-tech, and performing arts. It offers a comprehensive software solution for midsize businesses, which reduces the complexity of HR and improves employee engagement, while also boosting insight and compliance. Cezanne has been growing rapidly in the past four years, serving users from over 120 countries.
Manchester-headquartered NorthEdge is backing the growth plan of Cezanne co-founder and chief executive Alberto Gabbai, chief operating officer John Hixon and their team. Private equity funding is being used to help with customer retention and acquisition, as well as product development and investments in people. NorthEdge SME Fund I, headed by Jon Pickering and Dan Matkin as well as Simone Masterson and Dan Matkin, was the source of funding. Matkin will be joining the board as a representative of NorthEdge. Ian Kelly is also joining as a non-executive chairman.
Alberto Gabbai, Cezanne’s chief executive officer, said that the partnership with NorthEdge marked a new exciting chapter for Cezanne HR. NorthEdge will help us to grow faster, both financially and in other ways.
Lawyer Monthly spoke with Gerard Dempsey of EM Law for some additional insight on this transaction.
Tell us more about EM Law’s role in this investment.
EM Law worked closely alongside Cezanne’s management to ensure the transaction was structured in a way that aligned the interests of Cezanne Management and NorthEdge. This would ensure that the management of Cezanne were motivated to work with NorthEdge and grow the business.
What skills and expertise did you bring to the team?
We are fortunate to have a team of experienced and senior corporate and commercial transactional attorneys here at EM Law. They have held senior positions in City law firms, but also in-house. Many of them also have extensive experience advising corporates as well as management teams. This depth and variety of experience allows us to not only focus on the commercial and strategic goals of our clients, but also to help bridge the gap between the perspectives of the “buy-side” and the “sell-side”, which is important in a MBO.
What were the biggest challenges you faced during your MBO? How did you overcome them?
Private equity transactions are interesting, but they can also be challenging. One aspect that makes them both exciting and challenging is the need to reach consensus about the extent to which the parties may have positive or negative influence over the company after the investment. This transaction was not any different.
The key difference between this transaction and others I’ve been involved with previously is the complete exit of Cezanne from a large block of family shares.
It was difficult to strike the right balance when it came time to control issues, as founders and managers had invested a significant portion of their stake in NorthEdge.
The deal was benefited by the collaborative approach of NorthEdge’s legal advisors. We were able to reach a compromise between both positions, and the parties felt comfortable with the solution.