Acquisitions Monthly articles from December 2003

Acquisitions Monthly archives from December 2003

The value of hostility: hostile deals can deliver more shareholder value than "lukewarm" deals.
December 1, 2003... There is a determined counter-thrust afoot among M&A practitioners against the academic orthodoxy that M&A deals don't create shareholder value. Acquisitions Monthly revealed earlier this year results of research by consultants Bath &...

Light begins to shine through in Italy: Italy was again at the forefront of M&A activity after SEAT Pagine Gialle spun off its directories business for US$6.6bn. Still difficulties remain.
December 1, 2003... The sunny times enjoyed by the deal-makers in the investment banks whose offices dot the area within a mile or so of the La Scala opera house were shrouded in autumnal and winter fog within 12 months of the festive toasting of the beginning of...

Playing the league table game: investment banks will be grateful that at least one Western European market is growing again. The competition at the top end, however, is becoming tougher.
December 1, 2003... A small elite of investment banks is enjoying a relatively prosperous year in Italy if the league tables are to be believed. The middle market might still be sluggish, but at the upper end the growth in both deal value and volume make the...

Do big deals still drive Italy's market? Players are optimistic on the back of recent deals, but the Italian market should be handled with great care. Paola Subacchi reports from Milan.
December 1, 2003... Despite the sluggish economy, with a technical recession in the first half of the year, and a subdued stock market, private equity firms operating in Italy are optimistic. This is because activity, suddenly picked up during the summer after a...

Family firms: difficult, but interesting: not only do family firms represent an important part of Italy's economy--approximately 60%-65% of companies are run by a single family unit, in both traditional and advanced sectors--but they are also its most dynamic component.
December 1, 2003... According to recent research published by Mediobanca, the leading 14 companies from a sample of about 2,300 with turnover between 50m [euro] and 265m [euro] and annual growth rates of more than 20% are family-owned. This is because family firms...

Synopses of the largest deals in November 2003.
December 1, 2003... US: St Paul Cos (SPC) agreed to merge with Travelers Property Casualty (TPC), a provider of property and casualty insurance services and a majority-owned unit of Citigroup, in a stock-swap transaction valued at US$16.14bn. SPC offered 0.4334...

Sector pricing of 2003 European deals: Acquisitions Monthly compares median EBITDA multiples across industries and look at the most buoyant markets this year.(Earnings Before Interest, Tax, Depreciation and Amortization)
December 1, 2003... The data reviewed comprised all completed and pending transactions involving European targets announced between January and November this year, and excluded equity carve-outs, recapitalisations, buybacks and exchange offers. Focusing on...

PCPI remains relatively stable: at 13.2, the private company price index in the third quarter of 2003 has maintaining its substantial increase from the second quarter, writes Peter Hemington of BDO Stoy Hayward.(Private Company Price Index)
December 1, 2003... With unemployment at its lowest levels for more than three decades, inflation firmly under control and the highly impressive profile of output growth in every, quarter since 1992, the UK certainly boasts a remarkable economic track record. ...

How to avoid losing your best talent: successful integration of management following a merger or acquisition is crucial. Ben De Haldevang of Integrum writes.
December 1, 2003... Finding success stories in M&A, in particular as regards to post-merger integration, can be difficult. The assumption that the completion of the organisational chart, the harmonisation of HR policy, and the physical relocation signals the...

Drax restructuring to complete in 2003: International Power's increased offer for debt makes deal likely.
December 1, 2003... The financial restructuring of the UK's largest power station should be complete before the end of the year--banks and bondholders accounting for more than 80% of the plant's 1.292bn [pounds sterling] (US$2.233bn) debt had given irrevocable...

Queens Moat faces another restructuring: the hotelier has been forced to call in the reorganisation experts again, eight years after a major restructuring.
December 1, 2003... Extrapolating from the fact that hotelier Queens Moat Houses is in discussions with its junior term debt banks, the irresistible inference is that it is in breach of its JTD repayment conditions: Why else would you want to speak to your banks?...

M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A transactions in November providing details and pricing of deals.(Mergers and Acquisitions)
December 1, 2003... SEAT Pagine Gialle's 3.2bn [euro] LBO facility has breached the 800m [euro] level of commitments in general syndication required to get the 17 joint lead arranging banks to their 100m [euro] target hold amounts, report mandated lead arrangers...

Resurrecting recruitment: the corporate finance recruitment industry is alive again after two grim years.
December 1, 2003... Fresh air is at last blowing through the once mothballed corporate finance recruitment business. This latest trend has come not a moment too soon for search firms that had found even mandates from boutiques drying up after the first quarter of...

Mergers Alliance seeks to step up a gear.
December 1, 2003... Boutique network Mergers Alliance is welcoming a US member, Chicago-based Billow Butler and Company, into its fold for the first time. A US capability is always seen as vital and could enable the Alliance, founded by UK-based Catalyst Corporate...

Insurance M&A head chosen as Lovells senior partner.(Institutions)
December 1, 2003... International law firm Lovells has elected John Young, one of the firm's leading corporate partners, as senior partner, as of May 1 2004. Young is currently head of Lovells' corporate insurance practice, having initially practised as a...

Buying into a wireless world: there is ample evidence of a recovery in takeover activity in the technology sector.
December 1, 2003... As we head towards the end of the year, there is positive news on the technology acquisition front. After three years of declining activity and reduced valuations, we have now seen two quarters of upward movement with a return to quite...

An offer Abramovich couldn't refuse: the collapse of the US$35bn merger between Yukos and Sibneft should pave the way for both companies to form strategic alliances with Western partners.
December 1, 2003... Yukos and Sibneft announced a "suspension" of their merger on November 28, after the Yukos board rejected demands from leading Sibneft shareholder Roman Abramovich to change the management of the merged company. However, Moscow analysts...

Competition for regional gas distributors: National Grid Transco's plan to sell off up to four of the UK's regional gas distribution networks for an estimated 5bn [pounds sterling] (US$8.6bn) has attracted a massive response.
December 1, 2003... The operator of the UK's national gas and electricity. transmission systems told analysts late in November that about 40 companies had signed the confidentiality agreements that are a prerequisite for receiving an information memorandum on the...

Anglian Water in Czech sell-off: Anglian Water has agreed to sell its Czech water businesses for 51m [pounds sterling] (US$88m).(Utilities sector report)(Vodovovy a Kanalizace Jizni Cechy)(Jonson Cox)(Chris Mellor)
December 1, 2003... Anglian Water Group (AWC) announced the sale of its 54.3% stake in SMVaK, the North Moravia-based water operator, to Czech and Slovak private equity firm Penta for 38m [pounds sterling]. In addition, Austrian utility company Energie paid 13m...

RSA disposals have cumulative weight: the UK insurer has made 12 disposals since the beginning of 2002.(Royal & Sun Alliance)
December 1, 2003... Royal & Sun Alliance's programme of disposals has been decidedly piecemeal but it has now gathered real cumulative weight. The UK's second largest insurer made its fifth disposal of the year in early December, that of Chilean life insurer La...

Celltech could be a target: after a quiet few years pharma is on the move again as companies seek to reshape their capabilities and bring new products to the market.
December 1, 2003... Celltech could soon find itself the subject of a takeover bid, as pharmaceutical giant Pfizer withdraws from its licensing agreement with Celltech's CDP 870 drug. This position as potential target is an about-turn for the British biotech...

EU merger regulation--between the idea and the reality: the European Commission has just announced the biggest reform of EU merger control since the merger regulation was introduced in 1990.(Legal and Regulatory)
December 1, 2003... The new regulation adopted by the EU Council of Ministers on November 27 introduces a welcome degree of flexibility into EU merger procedures, and provides notifying firms with greater procedural rights than under the current regulation. ...

Microsoft: the lessons to be learned: Microsoft faces a potential fine of more than US$3bn from the European Commission, following claims that the company has continued to abuse its monopoly in the software market. Neil Warwick of Dickinson Dees writes.
December 1, 2003... For the past half a decade competition lawyers have been able to analyse and comment on the US antitrust investigation into Microsoft, the world's largest and most successful software manufacturer. This case investigates the world's richest...

Top European buyouts announced November 2003.(Illustration)
December 1, 2003... TOP EUROPEAN BUYOUTS ANNOUNCED NOVEMBER 2003 Date eff Target Target Industry sector -- MTU Aero Engines GmbH (WG) Aerospace and aircraft -- Deutsche Bank-Real Estate Real estate,...

Getting out: private equity firms now realise it is not enough to be a good deal maker: they have to keep their assets clean too.
December 1, 2003... The prominence of private equity in the M&A market was confirmed this month when Permira sold three companies to fellow private equity firms. The group sold dental equipment maker Sirona to EQT; Azelis Sarl, a European chemicals...

Hicks Muse gobbles up Weetabix: Lyndon Lea, Hicks Muse Tate & Furst's European boss, talks to Ben Harding about the recent acquisitions and consolidation in the UK's food industry.(Behind the buyouts)(Interview)
December 1, 2003... The acquisition of Weetabix and Ambrosia by Hicks Muse, Tate & Furst's Premier Foods sends a serious message of intent to the highly fragmented UK food industry. The buyout of Hillsdown Holdings in 1999 gave the US private equity giant a...

PPMV gets in and out in one day: with the sale of Oasis and the buyout of TJ Hughes, PPM Ventures has further enhanced its reputation in the UK's retail sector. Gareth Whiley talks about the pressures of completing two deals in one day, and the increasing competition from his private equity peers.(Behind the buyouts)
December 1, 2003... Gareth Whiley, the retail sector boss at PPM Ventures, nearly got into hot water with the wife when two of his deals threatened to delay the family holiday. "It all got pretty hectic towards the end, especially as the staff" off-site fell in...

Kleinwort Capital backs Securistyle MBO.(Behind the buyouts)(management buyout)(Brief Article)
December 1, 2003... Kleinwort Capital has backed the 35m [pounds sterling] management buyout (MBO) of Securistyle, the manufacturer of dow hinges. Kleinwort Capital invested 11.3m [pounds sterling] in equity funding and Bank of Scotland provided 23m [pounds...

3i completes largest Swiss deal of the year.(Behind the buyouts)(acquisition of MIB Property and Facility Management)(Brief Article)
December 1, 2003... Funds managed and advised by 3i have backed the largest management buyout in Switzerland this year with the acquisition of MIB Property & Facility Management from Siemens Building Technologies. The deal, which was signed on November 8, is...

Duke Street acquires Accantia.(Behind the buyouts)(Brief Article)
December 1, 2003... Duke Street Capital has acquired Accantia, the maker of Lil-lets tampons and Simple skin care, for 225m [pounds sterling] US$388m). The UK-based mid-market buyout house bought the company in a secondary buyout from private equity peers ABN AMRO...

MidOcean sells Center Parcs: private equity firm completes two stage disposal.(Behind the buyouts)(Brief Article)
December 1, 2003... Private equity group MidOcean Partners has completed the two-stage disposal of Center Parcs through the sale of the UK business to Collins Stewart. Following the acquisition, which was completed using a newco called Arbor, the business will be...

Electra Partners buys Azelis.(Behind the buyouts)
December 1, 2003... Electra Partners Europe has secured the 135m [euro] buyout of speciality chemicals distributor Azelis Sarl from previous institutional backers Permira, Interbanca and Centrobanca. The group is paying 45m [euro] to acquire a 57% stake. The...

Hays disposes of logistics division.(Behind the buyouts)(sold to Platinum Equity)(Brief Article)
December 1, 2003... Hays has taken an important step in its bid to become a focused personnel business by announcing the disposal of its logistics division to US private equity group Platinum Equity. The agreement values the assets at 102.4m [pounds sterling] on a...

Investcorp puts Hilding Anders to bed.(Behind the buyouts)(Brief Article)
December 1, 2003... Global investment firm Investcorp has announced that it will acquire 100% of bed manufacturer Hilding Anders in a secondary buyout from Swedish private equity, groups Rams and Nordic Capital. Founded in 1939 in southern Sweden, Hilding...

KKR acquires MTU after fierce auction.(Behind the buyouts)(Kohlberg Kravis Roberts, MTU Aero Engines)(Brief Article)
December 1, 2003... After a fiercely competitive auction, US buyout giant Kohlberg Kravis Roberts has agreed to acquire MTU Aero Engines from DaimlerChrysler for an undisclosed stun rumoured to be about US$1.5bn. MTU is a global company specialising in the...

Halder-GIMV.(Funds)(mid-market fund closed)(Brief Article)
December 1, 2003... German mid-market buyout house Halder has reached a first close on 78m [euro] for the Halder-GIMV Germany programme, which was launched this summer. Investors in the first close include institutional investors from Germany, the UK, the US,...

Italian Mezzanine.(Funds)(Italy's first mezzanine fund offering)(Brief Article)
December 1, 2003... Italian Mezzanine, Italy's first mezzanine fund offering, is on track for a first close at the beginning of next year. Set up by Italian banker Roberto Liguori and with the backing and industry expertise of Gianfilippo Cuneo, founder of Bain...

Golding & VCM.(Funds)(Golding Capital Partners and VCM Venture Capital Management have set up a joint venture )(Brief Article)
December 1, 2003... German-based private equity fund-of-funds specialists Golding Capital Partners and VCM Venture Capital Management have set up a joint venture to launch the first mezzanine fund-of-funds in the region. VCM Golding Mezzanine hopes to raise...

Proventure.(Funds)(Proventure has signed agreement with Suomi Group and Pohjola)(Brief Article)
December 1, 2003... Finnish/Swiss private equity fund manager Proventure has signed an asset management agreement with two of Finland's largest private equity investors, Suomi Group and Pohjola, to take over the management of their private equity portfolios, with...

Bridgepoint and Electra sell Gower Group.(Exits)(Brief Article)
December 1, 2003... Bridgepoint Capital and Electra Partners have sold Gower Group, a UK-based supplier of self-assembly kitchens, to Nobia of Sweden in a transaction totalling SKr850m (US$112.5m). Gower was originally the subject of a 3.7m [pounds sterling]...

IRRfc completes Ward realisation.(Exits)(Royal Bank of Scotland)(Phildrew Ventures Fifth Fund)(Brief Article)
December 1, 2003... IRRfc has completed the realisation of its investment in UK house builder Ward Homes through a trade sale to Wilson Bowden. The acquisition price was 28.6m [pounds sterling] and the buyer assumes net borrowings of 41.6m [pounds sterling] to...

KKR's first European IPO.(Exits)(Kohlberg, Kravis, Roberts and Company L.P.)
December 1, 2003... Kohlberg Kravis Roberts has achieved its first flotation on a European exchange with the listing of Bermuda-based reinsurance group Alea. The IPO on the London market raised 165m [pounds sterling], with Goldman Sachs and Merrill Lynch acting as...

CapMan sells PIC Engineering.(Exits)(Brief Article)
December 1, 2003... Finnish private equity group CapMan has announced the sale of its holding in PIC Engineering Oyj's to the Swedish company SWECO. The company, which was delisted from the Helsinki stock exchange by Capman in 1999, is a leading player in the...

Mid-markets report December 2003.(moving in the mid-markets (US$500m-US$30m))
December 1, 2003... The middle market has suffered as much as any other part of the M&A market this year. Yet mid-market deals in the 50m [euro]-750m [euro] range are estimated to account for 70% of total M&A volume in Europe, attracting a diverse range of...

Renewed confidence in the North-West: there has been an upturn in M&A in North-West England since September as private equity players have returned to the market. Cherry Canovan reports from Leeds and Manchester.
December 1, 2003... Deals have been thin on the ground for M&A advisers in the North of England recently, reflecting the nature of the market as a whole. But summer seems to have put a spring back into the market's step, with the unanimous verdict that autumn has...

Fourth quarter points to growth: a slowdown in public-to-private deals in 2004 will be the backdrop to what players hope will be a busier year, with the return of larger deals. Sandrine Bradley reports from Dublin.(Ireland)
December 1, 2003... A succession of public-to-privates followed by a pick-up in general deal-flow in the fourth quarter have been the features of the Irish M&A market in 2003. This year has shown a fall in deal value from the previous year, but this was to be...

Le Mont, Manchester: set atop the magnificent new Urbis museum in Manchester's regenerated millennium quarter, Le Pont is winning the plaudits in the North-West.(Restaurant Review)
December 1, 2003... Urbis the museum that houses Le Pont, is an extraordinary, glass-clad ski-slope of a structure. The restaurant at its summit offers panoramic views over the city and, on a clear clay, tantalising glimpses of the Chesire countryside beyond. ...

M&A deal data.(Benelux, France, Germany)(Mergers and Acquisitions)
December 1, 2003... M&A deal data Benelux Target Bidder Duke Energy Europe Northwest BV Norway (NO) - Manufacturer, (NE) - Gas utility wholesale fertiliser, metals Sales ($): n/a Net Profits...

Monthly sector analysis: this sector analysis includes acquisitions and buyouts announced during November. UK public offers completed between these dates are included, whereas new and pending offers are excluded. The transactions are classified according to the US sic code identifying the industry sector in which the target company is principally engaged.(minority stakes)
December 1, 2003... Seller - activity Bidder - activity Price Date (US$M) 01: AGRICULTURE, FORESTRY, AND FISHING 0182: Food crops grown under cover Sylvan Inc (US) - ...

Close Brothers Corporate Finance: independent corporate advisory services to growth companies with international ambition.
December 1, 2003... Close Brothers Corporate Finance (Close Brothers) operates as an autonomous and independent business unit within Close Brothers Group, the UK's largest independent quoted investment bank. Headquartered in London, it operates internationally...

RSM EquiCo corporate overview.(investment bank)(Company Profile)
December 1, 2003... RSM EquiCo, Inc. is a global investment banking firm specialising in mergers, acquisitions, divestitures and corporate finance for private, middle-market businesses. The firm has approximately 400 professionals and support personnel in the...

Mid-market optimism justified: deal volumes are up in classic middle market territory, the worst could be over, according to corporate financiers.
December 1, 2003... The growing mood of optimism among ,mid-market M&A practitioners looks justified. An analysis of Thomson Financial data reveals that deal volume in important areas is comfortably up on 2002, even if 2001 figures remain a distant dream. But...

Return of trade buyers and IPOs: although the mid-markets have endured another lacklustre year, buyouts have proved the haven of the UK mid-markets. In Europe the return of trade buyers and the IPO market promise a brighter dawn.(Initial Public Offer)
December 1, 2003... There is cautious optimism in the mid-markets that 2004 will see the return of corporate M&A activity and the re-emergence of the IPO market. The latter is expected to have an impact on the steady flow of secondary and tertiary, buyouts that...

An Atlantic alliance: the alliance between Close Brothers and Harris Williams is providing middle market companies and private equity houses with a new and powerful transatlantic deal-making network.
December 1, 2003... True to its client base, Harris Williams has its roots firmly in entrepreneurship. It was founded in 1991 "in a room about one-third the size of this," says Hiter Harris, its managing director and co-founder, sweeping his hand round a...

The lure of the North American middle market: Richard M Rodnick says now is the time to make acquisitions in the US.
December 1, 2003... European dealmaking appears to be making a comeback. According to BusinessWeek, "signs abound that the fat days for the investment banking community are back." The market for cross-border transactions may be becoming even more dynamic. RSM...

Hot-spots in a cold sector: despite its image as a staid, slow-growth sector, the European food and drink industry offers opportunities for careful buyers. Ben Harding assesses the trend towards further consolidation and identifies the high-growth hot-spots that are luring the financial buyers.
December 1, 2003... Food and drink as an industry sector is both relatively unconsolidated and resistant to the economic cycle. The slow growth across the overall sector masks pockets that are growing very fast indeed. The twin dynamics of consolidation among...

Retail shows consistent form: the retail sector has had a high-profile year. Although consumer confidence is expected to take a knock as we enter the new year, the sector is expected to remain a focus private equity interest.
December 1, 2003... Without a doubt, the retail sector is at the forefront of of the M&A market now. However, a great deal of press noise fuelled by rumours and speculation has obscured the real levels of deal-making in the sector. Much of the talk has led to no...

The technology resurgence: confidence is returning to the technology sector, says Simon Willis of Close Brothers Corporate Finance.
December 1, 2003... Since the end of March, the technology sector has seen a resurgence in activity coupled with a recovery in the equity markets. The FTSE Software and Computer Services Index has risen by an impressive 500/o, compared to an increase of only 20%...

HgCapital wins Boosey & Hawkes battle: European Acquisition Capital and Stirling Square have let their joint offer for the listed music publisher lapse, giving victory to HgCapital.(Mid-market media)
December 1, 2003... European mid-market private equity firm HgCapital has won the race to acquire UK-listed music publisher Boosey & Hawkes after a consortium of Stirling Square and European Acquisition Capital decided against making an improved offer for the...

Support services: taking a longer term view: support services is a a very attractive sector now, says David Bezem of Close Brothers Corporate Finance.(Sponsored Article)
December 1, 2003... Support services companies hold a number of attractions for private equity firms. With fast-growth profiles and strong cash flow characteristics, they can experience exponential growth through contracts, such as Capita's contract to administer...

Commercial lawyers in demand: in this section we list UK firms that primarily work on mid-market deals, though many of those in our tables will also have worked on deals of higher value.(Mid-market league tables)
December 1, 2003... When asked by Legal 500 to assess several strengths of Freshfields Bruckhaus Deringer's M&A practice, clients listed strength in depth at partner and associate level; international reach; and a commercial approach to doing deals. Like...

Whither boutiques? How are boutiques dealing with the competitive challenges they face from the accountancy firms and larger investment banking advisers?(Boutiques)
December 1, 2003... Andrew Currie at Catalyst Corporate Finance says: "The boutiques are taking significant market share; our model has proved a threat to the big four [accountants]." It is generally accepted that the deal size that the big four are willing...

Financial advisory league tables.(Mid-market league tables)(Illustration)
December 1, 2003... COMPLETED 2002 ANY EUROPEAN INVOLVEMENT FINANCIAL ADVISERS (10-150M [euro]) Number Market Rank/adviser of deals share 1 PricewaterhouseCoopers ...

Eupopean M&A mid-market deals: in a regular feature for our annual mid-market review, we list the top 100 European M&A deals announced in 2003 according to Thomson Financial.(Mid-market deals)(mergers and acquisitions)(Illustration)
December 1, 2003... TOP 100 MID-MARKET DEALS ANNOUNCED IN 2003 Date Target Advisers 18/11/03 Seguros Bilbao (SP) Lehman Brothers 31/01/03 ISH KS BW GmbH & Co KG (WG) -- 24/06/03...