19 Aug 2020

Momentum Corporate Finance is delighted to announce the successful completion of its latest transaction, having advised the shareholders of Techmodal Limited on their sale to BAE Systems PLC.

Techmodal, which is based in Bristol and has approximately 120 employees, is a data science business that specialises in making sense of complex data to inform some of the most significant defence and security decisions for the UK Ministry of Defence (MOD).  It has a range of long-term prime contracts with the MOD in support of the UK’s armed forces, particularly the Army, Strategic Command and Royal Navy. 

It will sit within BAE System’s Maritime Services Division, and is a strategically important transaction for BAE, complementing BAE Systems’ existing digital, data and technical services capabilities.  Last year, the MOD launched the Defence Digital initiative which set out how it plans to increase its digital capabilities.  The acquisition of Techmodal will help BAE Systems to support the armed forces with their digital transformation.

BAE Systems is already working closely with the Royal Navy on its ambitions to be a fully ‘digital navy’ by 2025. The Data Integration Platform (DIP), which collates and presents data from multiple systems, allows the efficient management of the Queen Elizabeth Class aircraft carriers.  Bringing Techmodal on board will strengthen BAE Systems’ ability to support not just the Royal Navy but all the Services.

The deal is Momentum’s second successful completion in recent weeks, following the £25 million sale of Naimuri to Qinetiq PLC, and further showcases the team’s credentials in the defence and national security space.

We spoke to a range of advisers when we started to consider taking the business through an M&A process and are delighted to have chosen Momentum. From the outset Ali and the team worked hard to enable us to understand all available options from PE through to a full exit. Then, having decided on a full exit, Momentum identified and accessed a range of key strategic purchasers and ran a tight process to achieve an excellent commercial result. This was only possible as they invested in developing a good understanding of the unique value of our business which in turn enabled them to communicate this to potential buyers and secure the best deal. 

Having co-founded the business whilst at university some 15 years ago, I had not previously been involved in an M&A process. Ali and the team at Momentum put the founders and leadership team through an accelerated learning process which enabled us to understand and navigate the M&A market in a way that I did not think would be possible. Throughout the process it felt like a genuine partnership with both teams working as one in a relaxed and progressive way which massively contributed to the overall success of the project. For these reasons Momentum have been a great choice for us, and I would definitely recommend them to other business owners looking at strategic options for their business.

Martin Jonik, co-founder of Techmodal

This deal is great news for Techmodal and our customers including the UK Defence community. BAE Systems provides Techmodal with a stable platform to build to the next level of success for our rapidly growing business. We are certain that it will offer our employees and our customers brand new and exciting opportunities.
Fusing BAE Systems domain knowledge with our agile, consultative ways of working will enable us to bring our technical skills to wider internal and external markets and offer our partners a hugely capable new proposition for digital transformation and data led solutions.

Appointing Momentum to run our sale process was an excellent decision.  They helped us to navigate every step of the transaction, and their expertise and guidance was invaluable in securing an exceptional result for the shareholders and the business despite difficult macroeconomic circumstances.  Alastair, Matt and James became an integral part of our team and were a pleasure to work with – we would highly recommend them to other management teams considering an M&A process.

Gareth Vaughan, Techmodal’s Managing Director