Acquisitions Monthly articles from November 2003

Acquisitions Monthly archives from November 2003

Safeway fees mount.(Insight)(financial details of William Morrison's takeover bid for Safeway)
November 1, 2003... The fees being paid to secure Safeway's forthcoming deal with William Morrison are mounting steadily. They are well on the way to reaching the figure of 100m [pounds sterling] forecast in January, though not quite via the route envisaged then....

Cleaning up Central Europe: with eight central european countries due to join the European Union during the next few years, environmental consultants are likely to be in strong demand as investors try to protect themselves against potential liabilities when making acquisitions.(Environmental due diligence)
November 1, 2003... Poland, the Czech Republic, Hungary, Slovakia, Slovenia and the three Baltic States (Estonia, Latvia and Lithuania) are due to join the European Union next year; Romania and Bulgaria in 2007. Central Europe is no longer the ecological disaster...

Synopses of the largest deals in October 2003.(Market intelligence)
November 1, 2003... US: Bank of America (BofA) of Charlotte, North Carolina, agreed to merge with FleetBoston Financial Corp (FBF) of Boston, Massachusetts, a commercial bank holding company, in a stock-swap transaction valued at US$49.26bn. BofA offered 0.5553...

Quarterly premia fall: after the record-breaking highs of the first quarter, average quarterly premia seem to have been in a downward spiral as the year has progressed.(Market intelligence)
November 1, 2003... As the sun shone continuously during the third quarter of 2003, the average premia to the target share price one day and one month before the offer or bid talks were announced did not perform as brightly. Between July and September, the...

Sparks settle as Telewest reaches approval: the banks have decided against sending in the grim receiver.(Restructuring column)
November 1, 2003... The restructuring of Telewest, the UK's second largest cable company, is pretty much a cut-and-dried deal, with weary creditors still left to nod through the filing of a scheme of arrangement. It has taken more than a year to negotiate and sees...

Beating the cost of capital: in the third of a series of articles Michael Cahill, author of the recently published "analysing companies & valuing shares" discusses financing options for acquisitions.(Market intelligence)
November 1, 2003... How deals are financed is an important aspect of how the market reacts to a deal and whether the deal adds value by beating the "cost of capital". However, while there is a lot of focus on the theory, what of the more practical considerations...

SEAT Pagine Gialle.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... Front-running and secondary market rumours are blighting what is otherwise a successful general syndication for SEAT Pagine Gialle's jumbo 3.2bn [euro] loan. Mandated lead arrangers Barclays, BNP Paribas, CSFB and RBS report that the deal...

Scottish & Newcastle.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)(Brief Article)
November 1, 2003... Scottish & Newcastle has agreed to sell its estate of 1,406 pubs and hotels to Spirit Amber, the Spirit-fronted private equity consortium's bidding vehicle, for 2.51bn [pounds sterling]. Spirit Amber is a consortium led by Texas Pacific Group...

Avio Holding.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... Avio Holding's 925m [pounds sterling] senior debt has signed rough mandated lead arrangers Citigroup (bookrunner), Lehman Brothers (bookrunner), Banca Intesa and Mediobanca. A 25% oversubscription was raised in senior syndication and banks...

Materis.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)(Brief Article)
November 1, 2003... Senior syndication of the 965m [euro] debt backing LBO France's buyout of building materials group Materis has reached a successful close through mandated lead arranger ING. The 755m [pounds sterling] senior portion received a 100% commitment...

Linpac.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)(Brief Article)
November 1, 2003... General syndication of Linpac's 713m [pounds sterling] LBO facility has been put on hold until November. Mandated lead arranger Deutsche Bank is adjusting the deal, specifically the mezzanine piece, after it was criticised for being...

FL Selenia.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... The 560m [euro] facility backing Vestar's 670m [euro] secondary MBO of FL Selenia is progressing well at the sub-underwriting stage, through mandated lead arranger Mizuho Corporate Bank and lead arranger JP Morgan. Total debt to EBITDA is 5.6x...

Cementbouw Handel & Industrie.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... The 260m [pounds sterling] all-senior debt supporting the LBO of two divisions of Cementbouw Handel & Industrie by Irish building materials group CRH, CVC Capital Partners and the company's management has launched to a limited general...

Terreal.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... Senior syndication of 465m [euro] in senior and mezzanine facilities supporting the 400m [euro] buyout of Terreal by Carlyle Group and Eurazeo has closed well oversubscribed through mandated lead arranger ING. Both the senior and mezzanine...

Saft.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... Doughty Hanson has won the auction in what has been a two-horse race to buy battery systems designer and manufacturer, Saft, from Alcatel. CSFB is sole debt underwriter of the 390m [euro] LBO. CSFB will start initial discussions with...

PizzaExpress.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... The 200m [pounds sterling] PizzaExpress LBO financing has been launched to joint lead arrangers, through mandated lead arranger Bank of Scotland. Banks are invited to sub-underwrite 50m [pounds sterling] with a 20m [pounds sterling] target hold...

Refresco.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)(Brief Article)
November 1, 2003... The 230m [pounds sterling] facility backing 3i's buyout of Refresco has been launched with mandated lead arranger SG (bookrunner) and joint arrangers Fortis Bank and ING. The facility is split between 198m [euro] in senior debt and a 30m [euro]...

Michel Thierry.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... Michel Thierry's 220m [euro] MBO financing has closed oversubscribed, through mandated lead arranger Societe Generale. The company's management is buying out PAI's stake. The retail phase follows a successful senior syndication during...

Ceva Sante Animale.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)(Brief Article)
November 1, 2003... Senior syndication of the 122m [pounds sterling] senior debt for Ceva Sante Animale has closed oversubscribed and the deal has been signed through mandated lead arranger Natexis Banques Populaires and mandated arranger Credit Lyonnais. ...

Rodenstock.(M&A capital markets round-up: Acquisitions Monthly reviews the financing of leading M&A Transactions in October, providing details and pricing of deals)
November 1, 2003... The 155m [euro] senior debt backing Permira's buyout of a 49% stake in German spectacle manufacturer Rodenstock has been launched through mandated lead arrangers Barclays (bookrunner) and RBS. The facility comprises a 50m [euro] six-year...

Boost for advisory boards: Sir Edward George and Sir Malcolm Rifkind join an important band of senior executives.(Institutions)(PricewaterhouseCoopers Corporate Finance and Rothschild)
November 1, 2003... Rothschild and PricewaterhouseCoopers Corporate Finance are strengthening their advisory boards with the appointments of Sir Edward George and Sir Malcolm Rifkind respectively. The moves are another sign that non-executives are becoming as...

Mackenzie leads PAI charge into UK: PAI opens London office under former Candover director.(Institutions)
November 1, 2003... France's largest private equity firm PAI is opening a London office as it promised to do at the beginning of the year. The partner in charge, Hamish Mackenzie, a former director at Candover who has nearly 14 years experience of the market, says...

New chairman for Global M&A.(Institutions)
November 1, 2003... Carlo Montenovesi has been elected chairman of international investment banking boutique network Global M&A. Montenovesi is chairman and founder of Italian boutique Cross Border, which was setup in 1990. The Milan based corporate finance house...

Departures dent fundraising prospects.(Institution)
November 1, 2003... Key departures at three of Europe's leading private equity firms will have An impact on fundraising prospects ever the next six months The large institutional investors that bankroll Europe's private equity industry are nervous. Those...

All far from quiet on the Russian front: Russia is as big a draw for the global oil industry today as it was for Europe's most prominent military dictators in the past.(Oil and gas sector focus)
November 1, 2003... The country's estimated reserves of 116bn barrels represent the largest known regional accumulation outside the Middle East, and Western investors are looking at various ways of acquiring a share of it. A report in September from a US firm...

UK oil and gas draws renewed interest: international oil companies are increasingly looking to divest mature assets in the north sea to focus on the development of big discoveries in newer oil provinces.(Oil and gas sector focus)
November 1, 2003... This year has seen several new entrants come into the British sector, including some start-up ventures. The first and most spectacular deal of the year saw BP sell its hallmark Forties field to the US independent Apache for US$1.3bn in...

Powergen seals purchase of Midland: the acquisition gives German parent E.on the opportunity to expand its customer base and reinforce its position as a vertically integrated energy provider with a dominant position in the UK market.(Utilities sector report)
November 1, 2003... Powergen announced last month that it would acquire Midlands Electricity in a deal that will see it pay just 34m [pounds sterling] more for the distribution company than the Scottish & Southern Energy offer for the company that was rejected in...

American exodus continues.(Utilities sector report)
November 1, 2003... American Electric Power as instructed Citigroup to pursue a negotiated trade sale of its two 2,000MW coal-fired power stations in the UK, at Fiddler's Ferry in Cheshire and Ferrybridge in Yorkshire. The US bank has a mandate to conduct...

Custody battle begins: it is a sellers' market for custody businesses, an unglamorous but increasingly valuable part of financial services.(FIG sector report)
November 1, 2003... Custody is certainly not the most glamorous part of the financial institutions sector, In an industry that is otherwise a welter of high-flying and high-octane activities, custody work is a relatively low-key function of fund administration,...

Lazard to win deftly managed auction: the investment bank prepares to take a leap into broking.(FIG sector report)
November 1, 2003... Lazard, at the time of writing, is the favourite to buy UK-based broker Panmure for more than 50m [pounds sterling], including 40m [pounds sterling] of debt. The auction has been skilfully managed by Nick Wells, WestLB's canny and experienced...

Deal of the year called off--for now: there is now serious talk of consolidation in the US telecoms sector with Bellsouth, SBC communications and Verizon communications in play.(TMT sector report)
November 1, 2003... In the end, BellSouth decided on October 28 to walk away from a proposed US$20bn cash-and-stock acquisition of AT&T after panicking over the proposed price tag. Nevertheless, the tact that a Baby Bell phone company came so close to acquiring...

Dealing with a multi-headed hydra: executives have good reason to worry over the EU's plans to decentralise antitrust enforcement.(Legal and Regulatory)
November 1, 2003... FU antitrust law will be able to be applied by all the Member State National Competition Authorities (NCAs) and the European Commission under Regulation 1/2003. This raises the fearful prospect of the same deal being challenged again and again...

Third Mid-Market Forum.(Moving in the mid-markets)
November 1, 2003... Over 250 leading M&A practitioners from 25 countries met in Dublin for the third M&A Mid-Market Forum on 10 October 2003. The event is organised by Acquisitions Monthly in conjunction with M&A International. The Forum's highly structured...

Financial sponsors take the lead: private equity steals a march as M&A reaches the fragmented funeral services sector.(Deal of the month)(Mergers and Acquisitions)
November 1, 2003... Consolidation in the funeral services market is set to pick up as private equity players begin to take a firm grasp on the fragmented sector. The last month has seen a number of deals in the funeral industry. These have included Sovereign...

The US looks towards European healthcare.(Moving in the mid-markets)
November 1, 2003... This month saw an increase in US interest in the European healthcare sector both at the bulge bracket and mid-market ends. At the big end Of the market, there was the the US$3bn merger of UnitedHealthcare a division of United-Health Group with...

The fourth way: receivership remains the most common exit route from small private equity investments, accountants and corporate financiers blame the lack of proper management due diligence as a large contributing factor to this.(Mid-markets column)
November 1, 2003... Nearly half of all exits from private equity firms this year have been into the hands of receivers, according to statistics published by the Centre for Management Buy-Outs. Financial sponsors only like to talk to about trade sales, secondary...

Permira's European fundraising record: the first fully independent fundraising exercise for Permira has set a new European record but, as Charles Sherwood tells acquisitions monthly, the process was not all plain-sailing.(Behind the buyouts)
November 1, 2003... At a time when many of its peers are struggling, Permira has firmly established itself at the top table in European private equity with the close of a record-breaking new fund on 5.lbn [euro]. Permira Europe III, the group's debut independent...

ViaNova challenges the status quo: a new fund-of-funds launched by four industry old hands intends to shake up the private equity fund-of-funds business with a radically simplified fee structure.(Behind the buyouts)
November 1, 2003... New fund-of-funds start-up ViaNova has sent a shot across the bows of the industry by announcing the launch of a debut vehicle with a radically different fee structure. In contrast to the more typical funds-of-funds fee structure, the...

M&A deal data.(Mergers and Acquisitions)(Illustration)
November 1, 2003... Benelux Target Bidder Ballast HAM Dredging BV Meerweoord BV (NT)--Provide (NT)--Provide dredging, cable construction, civil engineering laying services services ...

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

Simmons & Simmons team profile.(Sponsored Profile)(Company Profile)
November 1, 2003... Simmons & Simmons operates a pan-European private equity practice consisting of members from all of the 13 offices across our European network. Our European practice consists of lawyers with specialist expertise in funds and financial...

Humility, a stranger no more: over the last 18 months, private equity has lost much of its hubris.(Overview)
November 1, 2003... The ability to attract fresh institutional capital into the asset class has fallen for the second year in a row, with the figure for 2003 likely to slump well below the 28bn [pounds sterling]-plus that was achieved in 2001. There have been...

Banking on success: the intensification of auction competition in buyouts is making the role of the advisory investment bank more important. Neil Sen looks at the challenges the big banks face in servicing financial sponsors.(Advisers)
November 1, 2003... Investment banks can be powerful allies for private equity firms. There is little doubt that, once hired, the advisers at the big end of the market, the "bulge bracket" banks and the larger corporate finance specialists such as Rothschild and...

Investors toughen up to beat the colder climate: although headline terms have remained largely unchanged, a downturn in fundraising levels and an increasingly vociferous set of institutional investors have forced managers to rein back some of the extravagances of the boom years.(Fundraising)
November 1, 2003... The supply of money into the European private equity market has fallen quite dramatically. According to research firm Initiative Europe, a rather unimpressive total of 15.bn [euro] has been raised in the year to-date, compared with 20.3bn...

The virtual bidder structure: this year saw the arrival of a new form of special purpose bidding vehicle. Ed Lukins of Simmons & Simmons explores the opportunity to offer a vendor listed shares as partial consideration in a buyout situation.(Sponsored Article)(Column)
November 1, 2003... In January 2003 Suez, the world's second largest water company, commenced an auction sale of the Northumbrian Water Group ("Northumbrian Water"). Suez resolved to dispose of a majority stake in Northumbrian Water as part of an ongoing asset...

Sector focus in the mid-markets: sector specialisation among mid-market private equity players has become an important tool in an increasingly overcrowded and sophisticated market.(Mid-market private equity)(Industry Overview)
November 1, 2003... The mid-market private equip, world has become increasingly overcrowded. As a result, the ability, of a house to differentiate itself from its competitors has become an essential ingredient for success. But how do these houses do this and add...

Private equity showcase: Acquisitions Monthly asked some private equity firms to select the deal from the past 12 months of which they are most proud.(Case studies)
November 1, 2003... Vivid Imaginations "It may be surprising that Phoenix is excited about an investment in the toy sector, an industry famous for 'one hit wonders', which struggle as soon as their particular bubble bursts. In Vivid, though, we really do...

Have we got a map? Lumbered with portfolio companies for longer than planned and with investment performances under pressure, secondary--and even tertiary--buyouts, recapitalisations and general deal re-engineering have become regular features.(Beyond the buyouts)(Illustration)
November 1, 2003... LUMBERED WITH PORTFOLIO COMPANIES FOR LONGER THAN PLANNED AND WITH INVESTMENT PERFORMANCES UNDER PRESSURE, SECONDARY--AND EVEN TERTIARY--BUYOUTS, RECAPITALISATION AND GENERAL DEAL RE-ENGINEERING HAVE BECOME REGULAR FEATURES. Updates on UK...

Buyout volume holds up in the UK: the slow M&A market over the past two years has brought a large increase in the relative importance of private equity investment in buyouts.(UK)(Mergers and Acquisitions)
November 1, 2003... After rising from 5.6bn [pounds sterling] in 1995, buyouts reached a record 23.8bn [pounds sterling] in 2000. Market value then fell to 19.5bn [pounds sterling] in 2001 and declined further to 15.3bn [pounds sterling] last year. With 7.3m...

Secondaries important in France: secondary buyouts have become yet more important, with the number of buyouts from foreign parents also buoyant.(France)
November 1, 2003... Deal value in France almost trebled in 2002 to 16.5bn [euro] after falling slightly to 6.4bn [euro] in the previous year. Buy-in transactions accounted for more than three-quarters of this amount. In 2003, activity has fallen back closer to...

Interest focusing again on Germany: this year Germany is again providing a healthy level of buyout activity, with the first six months figure amounting to 5.4bn [euro].(Germany)
November 1, 2003... After reaching a record 15.1bn [euro] in 2000 it appeared that the German buyout market was about to begin to realise its full potential. Subsequent years, however, have failed to live up to that expectation, with just 7.4bn [euro] recorded in...

Funding for investment in Benelux: there has been a jump in the value and volume of the Dutch and Belgian buyout markets so far this year compared with 2002.(Benelux)
November 1, 2003... According to the Dutch venture Capital Association (NVP), 32% of private equity investment in 2002 was targeted at buyouts. If the investments of non-Dutch private equity houses such as CVC Capital Partners (Retail Network 394m [euro]), Carlyle...

Mega deals will lift Italy: Italy has seen a sharp slow-down in buyout activity but the rest of the year looks promising.(Italy)
November 1, 2003... The buyout market in Italy in the first half of 2003 slowed down after a remarkable year in 2002. The dramatic drop in buyouts recorded in 2001 had been followed by an upsurge in deal volume of 2-1/2 times in 2002. Value had increased nearly...

Improved flow of deals in Spain: the Spanish and Portuguese markets have yet to provide the level of activity seen in some of the Northern European regions.(Iberia)
November 1, 2003... The Spanish buyout market last year rose to a record 2.0bn [euro], which was slightly ahead of the previous record set in 1999 of 1.9bn [euro]. The first half of this year has seen activity running at a more subdued level, with the total only...

Promising future in Scandinavia: regional buyout houses are expanding their operations, average deal sizes are on the increase, and exits are proving easier than in recent years.(Nordic region)
November 1, 2003... The value of the Scandinavian buyout market has fallen every year since the record value of 6.5bn [euro] in 1999, and in 2002 stood at 3.3bn [euro]. In terms of Continental Europe's share, Scandinavia accounted for around 7% of the total in...