What happened next?
In this exclusive interview, we catch up with Dougal Hawes, the Managing Director of Smartbox, to see how things have gone following the sale of his business to The CareTech Group, the leading providers of social care since 1993.
Headquartered in Malvern, Smartbox is a market-leading creator of software and hardware that gives a voice to disabled people without speech and enables them to live more independent lives. For more than 15 years, the company’s assistive technology solutions have been improving the lives of thousands of people with disabilities across the world.
In 2018 the business was bought by Tobii Dynavox, a Swedish company that also specialises in developing and providing alternative communication technology to disabled people. Unfortunately, following an intervention from the Competition and Markets Authority (CMA), Tobii was required to divest Smartbox to maintain suitable levels of competition in the UK market.
Shaw & Co acted as advisors to the Smartbox management team during the divestment process while also supporting them in a personal capacity as they looked to form a partnership with the eventual acquirer of the business, The CareTech Group.
Having helped Smartbox to establish a strong partnership with CareTech, Shaw & Co then acted as part of the wider acquisition team, assisting in the negotiations with Tobii to ensure that the deal was completed smoothly and to schedule.
We caught up with Dougal Hawes, Smartbox’s Managing Director, to see how it all came together and what happened next…
"The hardware and software we create is now used by people all over the world."
I have been involved with the company since 2004 and during that time I’ve seen what started out as a family-run business grow from four employees to nearly 300. The hardware and software we create is now used by people all over the world. We develop a range of products including communication aids that help people who cannot speak to communicate effectively; equipment that enables people to operate technology around the home, such as televisions and lighting; and technology for those who are unable to operate a computer with a standard keyboard, mouse or touchscreen.
I first met Jim Shaw back in 2018 when Shaw & Co supported and advised us while we made the decision to sell the business to Tobii. After the intervention of the CMA, we went back to Shaw & Co to help our management team personally as we navigated the divestment process.
CareTech’s business is all about providing specialist care for disabled people. They run specialist schools across the UK and were looking to invest in assistive technology to improve the experience of their service users. We were introduced to them quite late in the sale process but, having quickly arranged to meet with them, it soon became clear that we had very strong alignment in terms of purpose and vision for the business. Shaw & Co helped us formulate this partnership while advising on how we could work together to acquire the company from Tobii.
"It is vital that you keep a firm lid on your emotions."
As we aligned ever more closely with CareTech, we looked at what our offer was going to be, as well as specifics such as future ownership, shareholdings and articles of the company. Shaw & Co helped us negotiate with CareTech in the first instance before progressing to working on the purchase from Tobii.
The Tobii negotiations themselves were actually fairly straightforward as we obviously knew the business inside out. Nevertheless, it was a competitive process so we had to ensure that we put in our best and most thorough offer.
One particular thing I learnt, however, was that, when going into negotiations like this, it is vital that you keep a firm lid on your emotions. To use a simple analogy, you’ve seen your dream house – your ‘forever home’ – and you really want it. However, you don’t want to overpay for it - or pay more than you can afford - so you really need to manage expectations. You’ve also got to be very calm and patient – there’s always a final chance to up your offer so it’s important that you hold your nerve.
"We’ve seen a huge amount of progress in the development of our products."
Since we partnered with CareTech, we’ve seen a huge amount of progress in the development of our products and a significant increase in the scale of the business. We’ve seen revenues increase dramatically as our technology is being used by more people than ever before. We’ve grown from 70 people to around 270 in just two years, due in part to the acquisition of Rehavista, the leading supplier of AAC (Augmentative and Alternative Communication) in Germany, which we acquired in December 2021. Like Smartbox, Rehavista has been helping people with complex communication and access needs to live more independently for over 15 years.
Perhaps most importantly, we have big ambitions to make alternative communications technology something that is far better understood and prescribed more regularly across the globe. Put simply, if you have problems with your vision, you get glasses. If it’s your hearing then you get a hearing aid. But what if you can’t speak? The technology exists, this is what we do, but it’s still not widely used or funded. There is a massive discrepancy. We see a huge part of our future as trying to change that.
The technology itself is also constantly evolving. Faster computers and longer battery life is having a huge impact while we’re now able to localise our offering even more – we’re currently offering solutions in over 30 languages. In five years’ time we think we will be in a place where people see communications technology as something they understand and have a right to.
"If you don’t know how to solve a problem then don’t force a decision."
I think the crucial thing is to never forget the human side of the process. When we acquired Rehavista in December 2021, we were buying a business with a management team and that we wanted to continue working with in the future. Making sure we had that alignment was crucial to ensuring that we were going to work together effectively. It’s very easy to just focus on the numbers,
It’s also important to get people comfortable with uncertainty. If you don’t know how to solve a problem then don’t force a decision. People will tell you that making the wrong decision is better than making no decision, but when you are navigating complex changes our experience has taught us to be patient and allow time to help your find the right path. I also think it is crucial to ensure that a retained management team have the space to operate and are trusted to make decisions they are best placed to make.
For me, one of the crucial measures is whether the sellers will look back in five years’ time and be happy that they sold their business to you, that all their hard work is in good hands, and that the employees are well looked after.
It was vital because it filled in a massive knowledge gap in terms of structuring and financially supporting a deal. However, it was also important in terms of the negotiations with CareTech as it enabled us to step back slightly while Shaw & Co ironed out the details. This was the key as obviously we were going to be working with the CareTech team going forward.
After a CMA ruling requesting the divestment of Smartbox from its owner Tobii AB, we were approached to find a new owner. Find out how we made it happen.
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