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Transactions

December 2012
New York, New York
has been acquired by
London, England


Background

Knovel Corporation, founded in 2001 and based in New York City, developed a cloud-based search engine and information platform for the science and engineering community.  The platform integrates extensive technical information from more than 4,000 sources and extends the value of that data with robust search and data analysis tools, enabling engineers to not only easily find relevant data, but also analyze, document and incorporate it into their everyday work. These tools expedite the search process by allowing users to generate answers that may have previously taken hours searching through print or unsorted electronic records.  It is like a “Google” for engineers”.

As time went on, more and more firms took note of the business Knovel was building.  Three of those firms asked for and received informal management briefings before Marlin & Associates (M&A) was involved.  One of those parties submitted an unsolicited and non-binding indicative offer to purchase the company.



Overview

Shortly before Thanksgiving, with less than 10 weeks before the end of the calendar year (and changes in the Tax code looming), Knovel’s Board of Directors engaged M&A to help them develop, understand and select strategic alternatives, with a goal of completing a transaction before year end.  During this same time, the US news was flooded with talks of the “fiscal cliff” and the possible ramifications of venturing over the edge, which only heightened tensions and sensitivity to any sort of risk that a deal might bring to parties on both sides. 

While the Knovel Board considered the value indicated by the first party to be ‘reasonable’, and considered the firm to be extremely reputable, the offer was subject to due diligence, including verification of the very substantial assumed cost savings that would come from the elimination a large portion of the company’s staff.  The Board wanted to know if another party (i) would pay as much (or more) as the first party; (ii) not eliminate staff; and (iii) could close by year end.  They also wanted to know if the first party would pay more than initially offered. They also didn’t want to lose the first party if that party turned out to be the best alternative.

Meanwhile, after M&A was engaged, the first party made it clear that (a) they could only get to a closing by year end, if their offer were accepted immediately, and (b) they were not interested in an auction process and would withdraw their offer if there was competition. 

M&A organized a dedicated team to work closely and quickly with Knovel’s management team to identify potentially interested parties and develop materials that would seamlessly communicate the Company’s story, growth potential, strategy, execution plan and financial projections to those parties.  M&A then managed a rapid competitive process providing additional materials to the first party as well as to other parties in US and the UK.  M&A helped Management build expensive financial models, frame the story properly and spend the time with these parties to ensure that they understood the Company’s unique value proposition and growth potential.  When the process narrowed to a few interested parties, M&A advised Knovel’s Board on negotiation strategies with those few, while at the same time working with the Company’s disparate shareholder base (comprised of management, employees, three institutional investors and other smaller early investors) to ensure common agreement and objectives.

Three parties submitted offers including a revised and increased offer from the initial bidder.  But only two of those parties committed to a close by year end: the initial bidder plus Elsevier, the UK-based world-leading provider of scientific, technical and medical information products and services.  After careful consideration, and negotiation, on December 28th, Knovel’s Board sold the company to Elsevier.

M&A Role

M&A worked diligently on the deal to craft materials, initiate conversations and negotiate alternative offers with multiple parties as quickly as possible so that when the right suitor was found there would be enough time to complete due diligence reviews and to negotiate final legal documents by year end.  Long nights, early mornings and busy weekends were no stranger to all parties involved.

Meetings were held remotely via video conference to save on travel time.  Through hard work and determination, M&A was able to help Knovel and Elsevier come to agreement on numerous issues that arose.

Knovel’s comprehensive list of content contributors, engineering-specific search, and tools such as interactive graphs, together with Elsevier’s deep engineering content base and global market reach, will allow Elsevier to deliver an even more comprehensive and better integrated solution for engineers and engineering students.

As a leading publisher of engineering journals and books, Elsevier offers global reach, an extensive partner network and a high-quality pool of relevant engineering content.  Elsevier has a longstanding content licensing relationship with Knovel and will continue to seek out the best engineering content available for customers. This acquisition gives Elsevier the opportunity to provide customers with an enhanced experience and allows them to penetrate new markets.

Press

Elsevier Acquires Knovel

January 07, 2013

New York, NY, January 7, 2013 – Elsevier, a world-leading provider of scientific, technical and medical information products and services, announced today the acquisition of Knovel Corp. New York City-based Knovel provides a web-based application that integrates technical information with analytical and search tools to drive innovation and deliver answers engineers can trust.

Founded in 2001, Knovel has developed a deep knowledge of the engineering community and is a valuable tool for thousands of engineers and students in more than 700 corporations and engineering schools worldwide. Knovel integrates information and data from more than 100 engineering societies and publishers and makes it highly searchable and interactive so that engineers can easily manipulate the data they find and use it in other engineering applications.

“Knovel’s comprehensive list of content contributors, engineering-specific search, and tools such as interactive graphs, together with Elsevier’s deep engineering content base and global market reach, will allow us to deliver an even more comprehensive and better integrated solution for engineers and engineering students,” said Alexander van Boetzelaer, Managing Director of Elsevier Corporate Markets. “This acquisition will give us the opportunity to provide an enhanced experience for our customers as they work to overcome engineering challenges and improve technical outcomes.”

Recently named by research firm Outsell one of the “10 to Watch” in scientific/technical and medical publishing, Knovel has expanded its offerings and customer base as multiple factors have influenced the engineering technical reference market segment. This market has grown rapidly, driven by advancements in technology, the proliferation of technical data, the demand for cross-disciplinary knowledge, an aging engineering workforce and need to educate the next generation of engineers.

“This is a great new chapter for Knovel,” said Chris Forbes, Knovel President and CEO. “The acquisition gives us an exciting way to expand Knovel’s technology, innovation and comprehensive content selected from the best engineering publishers and societies to more organisations across the world.”

As a leading publisher of engineering journals and books, Elsevier offers global reach, an extensive partner network and a high-quality pool of relevant engineering content. Elsevier has a longstanding content licensing relationship with Knovel and will continue to seek out the best engineering content available for customers.

The acquisition is effective immediately and financial terms of the transaction are not being disclosed.

Marlin & Associates acted as exclusive strategic and financial advisor to Knovel.

About Knovel
Knovel is a Web-based application integrating technical information with analytical and search tools to drive innovation and deliver answers engineers can trust. Knovel users include thousands of engineers and applied scientists worldwide. Knovel has more than 700 customers worldwide including 74 of the Fortune 500 companies, five of the Top 10 Constituents on the FTSE 100 Index and more than 400 leading universities. Founded in 2000, Knovel is a private company headquartered in New York City. For more information, visit www.knovel.com or call +1-866-240-8174.

About Elsevier
Elsevier is a world-leading provider of scientific, technical and medical information products and services. The company works in partnership with the global science and health communities to publish more than 2,000 journals, including The Lancet and Cell, and close to 20,000 book titles, including major reference works from Mosby and Saunders. Elsevier’s online solutions include ScienceDirect, Scopus, Reaxys, ClinicalKey and Mosby’s Nursing Suite, which enhance the productivity of science and health professionals, and the SciVal suite and MEDai’s Pinpoint Review, which help research and health care institutions deliver better outcomes more cost-effectively.

A global business headquartered in Amsterdam, Elsevier employs 7,000 people worldwide. The company is part of Reed Elsevier Group PLC, a world-leading provider of professional information solutions in the Science, Medical, Legal and Risk and Business sectors, which is jointly owned by Reed Elsevier PLC and Reed Elsevier NV. The ticker symbols are REN (Euronext Amsterdam), REL (London Stock Exchange), RUK and ENL (New York Stock Exchange).

About Marlin & Associates

Marlin & Associates Holding LLC is a boutique investment banking and strategic advisory firm specializing in acquisitions and divestitures of U.S. and international middle-market firms that provide technology, digital information and healthcare-related products, technology and services. The firm is headquartered in New York, NY and has additional offices in San Francisco, CA; Washington, DC; Toronto, Canada; and Hong Kong, China.

Marlin & Associates Securities LLC, a wholly-owned subsidiary of Marlin & Associates Holding LLC, is a broker-dealer registered with the Securities and Exchange Commission and is a FINRA/SIPC member firm. Investment banking and/or securities are offered through Marlin & Associates Securities LLC. Marlin & Associates' professionals have advised on more than 200 successfully completed transactions.

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