Crawford Scientific Case Study

Maven provides M&A expertise to fast-track Crawford Scientific’s growth.

4.7x

Total ROI for Maven Investors

Market Expansion

into USA, China and Europe

250%

Increase in Turnover

The Company

Crawford Scientific is the UK’s leading independent supplier of chromatography products and analytical services to the laboratory research and testing sectors. The business combines operationally critical consumables support, with world class technical expertise, training, software and analytical services, to offer a complete end-to-end solution for users of chromatography instruments and techniques. Its customer base includes global blue chip clients such as GlaxoSmithKline, AstraZeneca, and BP.

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Summary

Crawford Scientific’s founder and Managing Director, Sam Crawford, saw the potential for further growth through pursuing an M&A strategy. However, he and his senior team had little experience of completing successful acquisitions and managing the complexities of integration.

Having helped dozens of companies to make key acquisitions, Maven was the ideal partner for Crawford Scientific, not only to ensure that the business had the financial firepower required to fund this strategy but also to impart knowledge and expertise to the senior management team to help them navigate the challenges associated with managing the acquisition process.

After investment, Maven worked collaboratively with the business to execute a number of strategic initiatives, including the acquisition of Hall Analytical Laboratories which enabled Crawford to increase its global reach, enter new markets in the US, China and Europe, and leveraging Hall’s reputation for pharmaceutical, agrochemical and environmental analysis.

During Maven’s partnership with Crawford, turnover and headcount doubled and profitability almost trebled, such that after three years the business had achieved its original objective and a sale was pursued to support Crawford through its next phase of growth. The business was subsequently acquired by Limerston Capital Partners, delivering a 4.5x money multiple return on the initial investment.

Crawford sees Maven as the right partner to continue its growth.

When Maven was first approached by Crawford Scientific about a potential funding requirement, the business, led by founder Sam Crawford, had already been operating successfully for almost 30 years, with a turnover more than £10 million. The business had forged a strong position within its specialist market and had an excellent reputation for its technical expertise and exceptional customer service.

However, Sam and his senior team shared greater growth ambitions, and had identified an acquisition as essential in helping them achieving their goal.

“We were too conservative in our approach to acquisitions”, explains Sam. “We knew what we wanted to do, however our team did not have the experience of navigating the M&A landscape and the associated challenges such as valuation, financing the transaction and successfully integrating the merged businesses. We required the right professional support.”

Bringing an external investor onboard can provide owner managers with a sounding board and a new perspective, but also a chance to de-risk their financial position. It also offers the opportunity to access new networks and, in the case of Crawford, expertise which can prove vital when seeking to undertake such a complex and transformational
acquisition.

As well being an astute entrepreneur, Sam is also a scientist by trade, and recognised that the investor he chose to work with needed to bring both business/commercial expertise but also required a detailed understanding of Crawford’s services and the market in which it operated. “The key for selecting which private equity firm to partner with came down to the people. David Milroy [Partner at Maven who led the transaction] has a background in science, with a PhD in Molecular Biology and Gene Delivery, and from the outset it was clear that he just got our business and would complement the team. This greater understanding left us with an increased level of confidence that Maven were the right fit to help us grow the company.”

Location and the benefit of local support also played its part in the decision to choose Maven. Crawford is based in the small town of Strathaven, 20 miles south of Glasgow, and Maven’s extensive network of UK offices, including a strong profile across Central Scotland, meant that it had a team within 45 minutes’ drive of the business. Having a strong regional presence has always played a core part of Maven’s investment offering, as experience shows that it helps to forge more collaborative professional relationships and a greater alignment of interests.

“Being local helped,” says Sam. “David and Alan [Robertson - Investment Director at Maven, who also worked on the original investment] were always available for discussions and to talk through the finer details of the planned acquisition. They brought a business maturity to our Board, with challenging questions and constructive critique. Selecting the right funding partner was a crucial decision for the business, so being able to have regular face to face contact was important to us.”

Maven’s support enables Crawford Scientific to execute its strategic growth plan.

Within months of Maven completing a £3.9 million investment in Crawford, for a significant minority stake, attention had turned to supporting the business in making its first acquisition. M&A can be a quick route to building and extending capability, geographic coverage and achieving greater scale, providing that the target and timing are right. During the investment process the team had identified Hall Analytical Laboratories as the primary target, based on an in-depth knowledge of the company after working successfully together over a period of years.

Maven had many discussions with Sam and his senior management team on what the business wanted to achieve operationally with the acquisition, and particularly in terms of enhancing its technical capability, widening the skill base in the workforce, broadening the services it offered to customers and further improving client service.

However, the team at Crawford had no previous M&A experience and recognised that they would need to execute the acquisition while maintaining the focus on the core business. “The workload associated with making an acquisition was a barrier,” says Sam. “We were fully committed to executing the strategy but knew we had to find a solution which ensured there was sufficient [senior management] bandwidth to complete appropriate due diligence, manage the subsequent integration and focus on delivering the full value potential for the enlarged business. That’s where Maven’s expertise was so crucial.”

Maven were able actively support the management team throughout the process by dedicating resource in the form of an Investment and Portfolio professional in addition to financing the acquisition through one of its cleint managed funds.

The acquisition added the provision of analytical services to Crawford’s offering and, critically, increased the company’s global reach, helping it enter new markets in the US, China and Europe by leveraging Hall’s reputation for pharmaceutical, agrochemical and environmental analysis. The integration process was well executed, with management quickly being able to re-focus on the core distribution business and driving the most promising business lines within Hall. Sam adds: “Maven’s investment and guidance enabled us to deliver growth targets ahead of plan and timetable.”

Ahead of budget performance attracts buyers

During the three years of Maven’s investment Crawford’s turnover and headcount doubled
and profitability almost trebled, through a combination of the successful acquisition of Hall
Analytical and the robust organic growth achieved across its distribution and knowledge
transfer divisions.

Management and Maven agreed that at this stage an exit would be desirable for both parties
and would be the ideal timing to enable Crawford to embark on the next stage it its growth,
including further M&A. Corporate finance advisors Strata were appointed to run a sales
process, which attracted interest from both trade buyers and other private equity houses.
Exclusivity was awarded to Limerston Capital Partners and the resulting sale delivered a
4.5x money multiple return for Maven clients.

Since the sale, Crawford has continued its impressive expansion, testament to the role that
private equity backing can play in accelerating growth. “Maven’s funding helped us
enormously in growing and developing our business,” says Sam. “They were pivotal in
enabling us get to where we are now and helped us ‘grow up’ as a company, making sure
we had the right infrastructure in place to develop for the future. Three and a half years on
from the sale we now have 200 employees, the group consists of five companies, and
turnover has increased by 250% since we were first backed by Maven”.