“[It] is a buggar of a contract so I would rather not draw attention to it unless we have to”

High Court issues £2.4m damages judgement after £45m acquisition of Midlands tech company

Hello Rainmakers,

When private equity backed Node4 made moves to buy tech business Tisski for £45m they did so with the best of intentions. What happened next is shocking. A warning. A lesson.

But if the main learning from today’s remarkable tale about a good deal gone bad then it’s this - be careful what you write down.

Alex Turner explains…

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Today’s tale takes us to a courtroom in Birmingham, for a judgement on Node4’s £45m acquisition of a West Midlands technology company, Tisski

The claim was focused on whether the sellers had to disclose underperforming and terminated contracts, and would the purchase price have been different if they had.

The case assessed the balance between recollections and messages sent in real-time, whether the sellers had been dishonest in not disclosing problems, whether they were required to disclose, and what was the likely outcome if they had.

The defendants’ valuation expert’s view was the practical result “would be one CEO picking up the phone to the other CEO, and doing a deal”.

But there was no phone call. Instead, three years later, there was a High Court judgement…