Acquisitions Monthly articles from February 2003

Acquisitions Monthly archives from February 2003

Switching sides: relationships are not quite as immutable as brokers would have us believe. (Insight).
February 1, 2003... Corporate brokers are apt to be a mite sententious about "relationships". Clients have to be nurtured and loved over many years, they say. While bankers might toss aside a client after a deal and move on, the broker stands loyally by, holding...

Safeway is the only way: acquiring Safeway could be the only way to expand in the UK supermarket sector, and doing the deal the only way to get a 10m-plus [pounds sterling] fee for some banks. (Deal of the month).
February 1, 2003... There has never been a line-up quite like it. To have six different parties openly expressing their interest in bidding for one target is unprecedented in the UK, according to experienced bankers with long memories. Supermarket groups do...

Synopses of the largest global deals in January 2003. (Market intelligence).
February 1, 2003... UK: Wm Morrison (WM) plans to acquire fellow supermarket chain Safeway through a stock swap tender offer valued at 2.925bn [pounds sterling] (US$4.7bn). Shareholders were offered 1.32 new WM shares for every Safeway share held. Based on WM's...

Little good cheer in the fourth quarter for bid premia: Q4 2002 resulted in the lowest quarterly volume of eligible transactions of the year, with only eleven deals completing, half of the total volume in Q3. Deborah Cust reviews the data. (Bid premia).
February 1, 2003... The average premia over the target share price one day and one month before the offer or bid talks were announced during the fourth quarter were 38% and 37% respectively, up on the third quarter's 29% one day average whilst the one month...

Bond shutdown threatens mega-buyouts: a dispute between bond and debt arrangers that threatens the way buyouts are funded. (Acquisition finance column).
February 1, 2003... The top-end of the buyout spectrum has traditionally relied on high-yield bonds (HYB) to plug the funding gap between equity and debt with cheap finance. The relationship between the senior lenders and the HYB arrangers has, for some time, been...

Telediffusion de France. (M&A capital markets round-up).(Brief Article)
February 1, 2003... Banks that joined the general syndication of the 1.34bn [euro] senior loan for Telediffusion de France signed into the deal on December 23, via mandated lead arrangers BNP Paribas Group and Citibank/SSSB. The six banks that joined at this...

Demag. (M&A capital markets round-up).(Brief Article)
February 1, 2003... The 1.225bn [euro] facility backing KKR's buyout of Demag Holdings from Siemens is fully subscribed via mandated lead arrangers CIBC World Markets, HypoVereinsbank and JP Morgan. Less than 200m [euro] needs to be raised in general, thanks...

Ontex. (M&A capital markets round-up).(Brief Article)
February 1, 2003... The senior debt financing at supporting private equity house Candover's E1bn-plus buyout of Ontex will total just over 500m [euro]. The facility will include senior and mezzanine debt and will fund the acquisition as well as refinance Ontex....

SigmaKalon. (M&A capital markets round-up).(Brief Article)
February 1, 2003... The leveraged finance backing the 1bn [euro] LBO of SigmaKalon by Bain Capital has launched to market via mandated arrangers CSFB and SG. The deal is backed by a circa 700m [euro] senior debt facility and a 100m [euro] mezzanine portion. ...

Fraikin. (M&A capital markets round-up).(Brief Article)
February 1, 2003... Sources indicate HSBC CCF has been awarded the sole mandate to arrange the leveraged debt package supporting the Eurazeo-led consortium's 805m [euro] buyout of truck rental group Fraikin from Fiat subsidiary, Iveco. Other relationship lenders...

Ferretti. (M&A capital markets round-up).(Brief Article)
February 1, 2003... Details of the 474.9m [euro] secured credit facilities for the 675m [euro] take private of luxury motor yacht maker Ferretti by Permira have emerged ahead of senior syndication. Mandated Mediobanca has HypoVereinsbank as joint lead arranger....

Casema. (M&A capital markets round-up).
February 1, 2003... France Telecom has agreed the sale of its Dutch cable TV and Internet business Casema to private equity trio Carlyle, Providence Equity Partners and GMT Communications Partners for 665m [euro]. The LBO is backed by a 345m [euro] debt...

Hirslanden Holdings. (M&A capital markets round-up).(Brief Article)
February 1, 2003... The CHF645m senior debt facility backing BC Partners buyout of a 91.15% stake in private hospital group Hirslanden Holdings from UBS has launched to general syndication via sole mandated lead arranger JP Morgan. This follows a successful...

Iberdrola. (M&A capital markets round-up).(Brief Article)
February 1, 2003... Iberdrola's 1.5bn [euro] financing was oversubscribed ahead of closing, via mandated lead arrangers ABN AMRO Bank (joint books), Banesto, BBVA (joint books), Credit Agricole Indosuez (documentation agent), Dresdner Kleinwort Wasserstein and JP...

TeleMedia. (M&A capital markets round-up).(Brief Article)
February 1, 2003... The 355m [euro] senior debt backing 3i and Veronis Sulher Stevenson's (VSS) 500m [euro] buyout of Dutch telephone directory company TeleMedia has launched to the market, via sole mandated lead arranger ABN AMRO Bank. Banks are asked to...

Teksid. (M&A capital markets round-up).
February 1, 2003... The 346m [euro] facility backing the 460m [euro] LBO of Fiat's Teksid aluminium unit by a consortium of private equity houses led by Questor Management is fully subscribed, with sole mandated lead arranger and bookrunner JP Morgan awaiting just...

Riverdeep. (M&A capital markets round-up).(Brief Article)
February 1, 2003... UK-based private equity house Alchemy Partners has reached agreement for the take-private management buyout of Riverdeep, the Irish web-based interactive learning company. Previously mooted debt arrangers Barclays Capital and Royal Bank of...

Nocibe. (M&A capital markets round-up).(Brief Article)
February 1, 2003... General syndication of the 145m [euro] senior debt financing to support the MBO of French luxury perfume and beauty retailer Nocibe is heading for an oversubscription, via mandated lead arranger BNP Paribas. Banks are offered two tickets in...

QinetiQ. (M&A capital markets round-up).(Brief Article)
February 1, 2003... The senior debt facility supporting Carlyle s leveraged buyout of a 33.8% stake in UK government-owned defence research group QinetiQ from the UK Ministry of Defence (MoD) will total 460m [euro]. Barclays Capital is mandated to arrange the...

Edscha. (M&A capital markets round-up).(Brief Article)
February 1, 2003... The 453.3m [euro] financing to back Carlyle Group's buyout of German automotive supplier, Edscha, will launch to subunderwriters via sole mandated lead arranger and bookrunner HypoVereinsbank The purchase price is thought to total 243m [euro],...

Restructuring branches out: turn-around and restructuring experts are moving into fresh sectors after a wave of telecoms work: acquisitions monthly launches regular coverage of M&A restructurings. (Restructuring).
February 1, 2003... Restructuring and business recovery are no longer dominated by telephones, cables and modish gadgetry. Profligate telecoms companies have been joined in their distress in recent months by a host of companies in other sectors. Such bad news for...

Merrill is no longer an upstart: there is a familiar cluster of firms at the top of the broking league tables but one is more prominent than the others. (Corporate broking).
February 1, 2003... Many brokers profess a detached, take-it-or-leave-it attitude to all league tables. "We don't ignore league tables, but for us the key thing is to keep focusing on the clients. If you have enough quality clients then over time the league tables...

Lazard man joins British Linen: British Linen Advisers has hired John Wilford as its chief executive. (Institutions).(John Wilford)
February 1, 2003... British Linen Advisers (BLA) has hired John Wilford, the former Lazard managing director, to boost its presence in the market. Wilford has joined in the newly-created role of chief executive and will lead a team of 30 corporate financiers,...

L&G and Duke Street pull back from Germany: the German market has been a big disappointment for buyout firms. (Institutions).
February 1, 2003... Mid-market private equity firms are coming round to the view that Germany is no longer a good place to do business. At least four non-German buyout firms set up shop in Germany in 2002 but now Legal & General Ventures has closed its German...

EU-US merger co-operation? Since the GE/Honeywell merger was prohibited by the European Commission in June 2001 EU and US authorities have made considerable efforts to reduce the possibility of conflict. (Legal and Regulatory).
February 1, 2003... In a statement of best practice adopted recently both authorities underline the importance of their objective-to avoid divergent approaches in merger assessment and the dangers of undermining public confidence in merger review. They also...

Predicting the future of food and drink: "how would you sum up 2002 in terms of M&A in the food and drink sector? What are your predictions for the sector in 2003?" (Corporate viewpoints).
February 1, 2003... "Last year was an active one in food and drinks--although there were no major deals. The most noticeable transactions were the takeover of Kamps by Barilla; the acquisition of Miller by SAB; the sale of the four former subsidiaries of...

PE consortia pick off cable assets: indebted telecom businesses are proving an equally happy hunting ground for private equity investors in 2003 as they were in 2002. (TMT sector report).
February 1, 2003... Last month private equity consortia snaffled two more cable TV networks from incumbent telecoms providers France Telecom and Deutsche Telekom. At the peak earlier this year, the two companies had combined debts running to 130bn [euro]. In a...

Pop of a flashbulb over deal: the first big Asia-Pacific TMT deal of 2003 will see the formation of Japan's fourth-largest manufacturer of cameras. (TMT sector report).
February 1, 2003... The announcement by Konica Corp on January 16 that it would merge with Minolta Co in a deal worth an estimated US$2.9bn was more about grim reality than paparazzi glitz, however. Both companies have struggled to keep up with larger rivals...

Tullett induced to change direction: Collins Stewart's efforts to persuade Tullett to change its strategy finally pay off after nearly a year. (FIG sector report).
February 1, 2003... Collins Stewart, the UK financial services group, finally announced its 251m [pounds sterling] (US$413m) acquisition of the inter-dealer broker Tullett after nearly a year of intermittent discussions. The deal represents a reluctant change of...

Acquisitions Monthly editorial calendar 2003. (FIG sector report).(Illustration)(Calendar)
February 1, 2003... January Annual M&A Review UK M&A Review Focus on Germany European Acquisitions in US Emerging Markets Overview February Buyout League Tables Broking in M&A Focus on Italy European Private Equity Review Restructuring...

Financial buyers line up for Northumbrian Water: the giant French group Suez is looking to sell Northumbrian Water as part of its debt reduction programme. (Utilities sector report).
February 1, 2003... Among financial buyers, Royal Bank of Scotland (RBS) and Citigroup, the two banks that have been most involved in the big UK water sector transactions to date, will certainly be attracted to a target of Northumbrian Water's size. Both...

Moving in the mid-markets (US$300m-US$30m): overview.
February 1, 2003... Overview The mid-markets in January proved a more interesting and diverse place than it has been for several months with a range of deals from sectors including healthcare, travel and building materials. Overall there was a strong UK...

Oxford and Cambridge merger: with CAT and OGS to merge, a precedent has been set in the biotech arena that could give rise to more consolidation. to more consolidation. (Sector watch: Biotech).
February 1, 2003... The expected 110m [pounds sterling] all-share merger of Cambridge Antibody Technology (CAT) and Oxford GlycoSciences (OGS) brings together two of Britain's best-funded biotechs. It is the biggest merger in the UK biotech arena for three...

North is big in the middle: the mid-market is providing a steady flow of deals for corporate financiers in both Manchester and Leeds, although the economy is still hampering trade purchasers. (UK regional focus).
February 1, 2003... The Northern cities of Manchester and Leeds, both home to substantial corporate finance communities, are on the whole feeling fairly buoyant about the year ahead. While admitting that they have been through some difficult times, most M&A...

Tax reforms to facilitate private equity in Italy: with private equity taking up the mantle in the Italian mid-markets, will the changes to the civil code encourage smaller LBO activity? (Focus on Italy).
February 1, 2003... The present economic conditions in Italy have seen private equity firms become a real and viable alternative to trade buyers in the mid-markets. According to data from the Centre of Management Buyouts, buyout activity in the 5m [euro]-250m...

Behind the buyouts.
February 1, 2003... Overview Last month's private equity action was dominated by telecom-related buyouts. Indebted incumbents France Telecom and Deutsche Telekom have both offloaded cable assets to private equity consortia in two huge deals, which are covered...

The 2002 buyout year in figures: despite the bleak underlying economic conditions, CMBOR figures show that in value terms at least 2002 represented a record year for European buyout completions. (European private equity review).
February 1, 2003... Centre for Management Buyout Research (CMBOR) statistics show that the value of completed buyouts rose last year to just over 39bn [euro] from 31.3bn [euro] in 2001. However, in volume terms, the picture is somewhat different. In 2002, 456...

Hope springs eternal in the mid-market: despite very difficult geopolitical, economic and market conditions, mid-market private equity players seem remarkably upbeat about the year to come. (European private equity review).
February 1, 2003... At the heart of the confidence, which is by no means universal, is the belief that there is a steady pipeline of businesses with good underlying fundamentals available at reasonable prices. This contrasts with much of last year, when vendors...

Sporting Index buy. (Behind the buyouts).(Brief Article)
February 1, 2003... Duke Street Capital has made a recommended cash offer to acquire Sporting Index in a management buyout that values the spread-betting business at 17.50 [pounds sterling] per share or 52.7m [pounds sterling] (US$87m). Royal Bank of Scotland...

Close Brothers acquires Fosroc. (Behind the buyouts).
February 1, 2003... Close Brothers Private Equity has reached agreement to acquire Fosroc Mining from Burmah Castrol for 32m [pounds sterling] (US$53m). Fosroc Mining was one of the speciality chemicals businesses acquired by BP in its purchase of Burmah Castrol...

Dynegy exits European communications. (Behind the buyouts).(Brief Article)
February 1, 2003... Private equity companies have had a busy month snapping up cable networks from distressed corporates (see TMT report). Troubled US-based utility Dynegy became the latest to bale out of the sector when it announced that it had sold its entire...

New entrants chase the mid-market honey pot: despite the tough fundraising climate in the European mid-market, new groups are emerging to challenge the established players. (Beyond the buyouts).
February 1, 2003... The accepted wisdom in the private equity world at the moment is that if you don't have a track record you won't raise any money. According to this story, risk-averse institutional investors are sticking to what they know when it comes to...

DBG rounds off first close. (Funds).(Brief Article)
February 1, 2003... DBG Eastern Europe, the private equity house set up with the backing of German private equity firm Deutsche Beteiligungs in 1996, has completed a first closing at 67.2m [euro] for its second fund targeting later-stage investments in the region....

Pantheon finalises fund three. (Funds).(Brief Article)
February 1, 2003... Pantheon Ventures has announced the final close of Pantheon Europe Fund III (PEuro III), its latest European fund-of-funds, on 470 [euro] million. PEuro III, which incorporates institutions from Europe, North America, Asia and Australia, has an...

4D Global Energy. (Funds).(Brief Article)
February 1, 2003... Europe's first Oil & Gas focused private equity vehicle, 4D Global Energy, has secured 60m [euro] (US$64.8m) in commitments at first close. The group, which is using Global Private Equity, a France-based placement agent, has a final target of...

First close for Nordic Mezzanine. (Funds).(Brief Article)
February 1, 2003... Nordic Mezzanine has held a first closing on 150m [euro] for its second fund. Launched towards the end of last year, the fund has a total target of 200m [euro]--double the size of Nordic Mezzanine Fund I. Like its predecessor, the fund will...

Brownhills. (Exits).(Brief Article)
February 1, 2003... The secondary buyout of Brownhills, the UK's largest retailer of motor homes, has provided Royal Bank Development Capital with an exit from its 1999 investment. NBGI Private Equity, the private equity arm of the National Bank of Greece, backed...

Nordic Info Group. (Exits).(Brief Article)
February 1, 2003... EQT has realised its investment in Nordic Info Group by selling the business to Experian for DKK1.1bn on a cash and debt-free basis. The return on the investment was not disclosed. Nordic Info Group is a Danish-based credit and business...

Mixed messages from Italian PEs: "the prospects are not bad this year, and next year will definitely be better," says 3i's Sergio Sambonet, David lane talks to market players. (Focus on Italy).(Associazione Italiana degli Investitori Istituzionali nel Capitale di Rischio)
February 1, 2003... "War against Saddam Hussein has been discounted. The bad news is already in the market," says Sergio Sambonet, head of 3i Europe in Milan. He is expecting an upturn in opportunities. Disposals were the focus of his business last year, with 3i...

Fiat speculation enlivens Italian M&A: at first sight, a breakup of Fiat would appear to offer a stimulus to investment banking in Italy, but the financial, property and utilities sectors offer longer tern greater prospects. (Focus on Italy).
February 1, 2003... The death on January 24 of Giovanni Agnelli, honorary chairman of Fiat, Italy's biggest industrial group, had been expected. He had been seriously ill for some time and had withdrawn from public life many months before. Agnelli had stood down...

M&A deal data.(Illustration)
February 1, 2003... M&A deal data Benelux Target Bidder Agfa-Gevaert - Materials Testing General Electric Co {GE} (US) Division (BE) - Provide materials testing - Manufacture aircraft engines services ...

Monthly sector analysis.(Illustration)
February 1, 2003... Monthly sector analysis THIS SECTOR ANALYSIS INCLUDES ACQUISITIONS AND BUYOUTS ANNOUNCED DURING JANUARY 1 2003. UK PUBLIC OFFERS COMPLETED BETWEEN THESE DATES ARE INCLUDED. WHEREAS NEW AND PENDING OFFERS ARE EXCLUDED. THE TRANSACTIONS...

Country codes.(Directory)
February 1, 2003... Country codes AA Albania AB Aruba AD Andorra AF Afghanistan AI Abu Dhabi AJ Ajman AL Algeria AM Armenia AN Angola AQ Antigua AR Argentina AS Austria AU ...