Business Grapevine

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An Aberdeen energy service business is to recruit more than 200 people after buying £100m of new vessels. The company has ordered four emergency-response and rescue vessels for operations in the UK North Sea, with an option for a further four. The vessels, due to be delivered next year, will lead to 200 seafaring roles and 15 onshore positions in Aberdeen.

The Scottish fabrication business is to recruit 100 people after winning another lucrative contract for a major North Sea gas project. The company is to take on workers at its Arnish, Methil and Burntisland yards to build the accommodation unit for GDF Suez’s £1.4bn Cygnus development. Around 20 of those jobs are expected to be created at the firm’s Arnish site in Lewis, matching the number the company said it would take on at the yard following its first Cygnus contract win.

The electrical wholesale business, which moved into its new headquarters in West Yorkshire in 2012, has had support from a £12m invoice finance facility from Lloyds TSB Commercial Finance to help its growth plans. The company has created 500 new jobs and is on track to deliver annual sales of over £80m in its first year of UK trading. The group has 450 stores across Europe and a team of 3,100 people. It plans to have 80 branches open throughout the UK by the end of 2013 and intends to create 2,500 jobs nationally as its branch network grows to 300 stores. To assist with its ambitious growth plans, Lloyds TSB Commercial Finance has provided the company with an invoice finance facility. The company has taken a 10-year FRI lease of property group Valad’s 64,904 sq ft warehouse in Normanton fronting the M62 motorway at a headline rent equating to £ 4.35 per sq ft per annum. The new headquarters will provide an excellent base for its UK operations.

A private ambulance firm has recruited 20 drivers since September 2012 and could create another 40 jobs in the next few years. The company is already the largest private ambulance operator in the North East region but plans to double in size in the coming years. The company provides transport for discharged patients at an hour’s notice whereas a traditional ambulance would take up to 24 hours to arrange. This helps free up ward beds for other people as well as taking pressure off the emergency drivers. The company takes 2,500 patients a month in 30 vehicles to and from appointments, and is used mostly in the evenings when the NHS only has a few drivers available. While it provides a limited blue-light emergency service transferring patients between hospitals including James Cook, Sunderland Royal and University Hospital of Hartlepool, it is not used for emergency call outs and has no plans to expand into this sector.

The Scottish Government agency has appointed the Halcrow Fairhurst Joint Venture in a £2.34m single supplier framework agreement to carry out investigations, appraisal, design, and reporting of options for an upgrade of a 16km section of the A82. Halcrow is a global full service consulting, design, construction and operations firm; Fairhurst is one of the largest multi-disciplinary engineering and environmental partnerships in the UK Halcrow and Fairhurst will deliver a full service solution reviewing the A82 between Tarbet and a point north of Inverarnan as part of an ongoing commitment to improve access to one of Scotland’s most visited areas. Improving the A82 will provide a significant boost to local businesses and tourism in the area by improving access to areas such as Loch Lomond and the Trossachs National Park. The Halcrow Fairhurst Joint Venture will deliver the project with a pragmatic approach to design, a sensitive consideration of the environment and an inclusive view of stakeholder feedback as essential prerequisites for success. The team will apply the ‘Fitting Roads’ approach they developed together with Transport Scotland, which focuses on working with the natural landscape, tailoring their design development to reduce environmental impact as much as possible. A further essential success factor will be ensuring that all future improvements to the road are carried out in a cost effective manner, ensuring value to the taxpayers and the road users over the long term. The win marks the beginning of a positive partnership between Halcrow and Fairhurst. The joint capabilities of Halcrow and Fairhurst provide the right mix of skills to help deliver this challenging and exciting project.

More than 150 jobs could be lost by the proposed closure of a Sheffield company which makes toilet rolls. The Swedish firm has started a consultation with staff over plans to close its Oughtibridge site in 2015. The plant used to be a paper mill but it is now used to convert paper made elsewhere into toilet rolls, paper hand towels, wiper rolls and medical rolls. The move would impact 161 jobs and the consultation would look at potential opportunities at other sites. A review has concluded the site should be closed in early 2015 and some of the converting lines relocated to its plant at Skelmersdale in Lancashire. Logistic operations would move to Ashton-in-Makerfield near Wigan. The review found that expansion of the Oughtibridge plant is not economically viable due to its age, infrastructure and manufacturing limitations.

The soft drinks firm is to close its Belfast factory with up to 20 job losses. In 2010, 52 jobs were lost at the company's east Belfast base on the Castlereagh Road. The company has been operating at the Belfast site for 20 years. The company has also announced it is to close its factory in Chelmsford, the city where the company was founded in the 19th Century, as part of plans to cut hundreds of jobs. The closure of the Fruit Shoot and J20 fruit drinks plant will result in about 230 job losses. As well as Belfast, the plans also include the closure of the firm's Pennine Spring water factory in Huddersfield with 40 job losses. The measures are part of the company's plans to merge its UK and Irish operations, which could mean between 300 and 400 people losing their jobs. The soft drinks firm announced cuts totalling £30m over three years as it reported a 50% surge in pre-tax profits, to £37.5m, for the 28 weeks to mid-April. The cuts are aimed to improve returns for shareholders and come ahead of a Competition Commission decision on its merger with Irn-Bru owner AG Barr, expected by July 2013. The company also has major operations in east London, Norwich and Leeds.


Mergers & Acquisitions

The former drug development company is to invest in the financial services sector. The company had previously attracted investment in anti-scarring drugs which it had under development, but the drugs eventually failed trials. The Manchester-based firm has announced it will now use its cash reserves of £26.4m to pursue investment opportunities in small financial services companies, such as alternative finance providers and debt management companies. The company, which is also conducting a share buy back programme, made a £1.7m investment in small business lender Ultimate Finance during a six-moonth period to the end of March 2013. The board will continue to focus on its recently approved investing policy and its share buy back programme, as appropriate, in order to enhance shareholder value.

The group has sold its remaining car dealership business for £31m. The Manchester mutual has agreed a deal to offload its three West Yorkshire Land Rover franchises, which trade as Albert Farnell, to Newcastle's Vertu Motors. In the year to 31 December 2013, Farnell made operating profits of £3.9m on unaudited revenues of around £113m. Vertu will pay for the acquisition by raising £50m through a share placing. Vertu expects the acquisition to be earnings enhancing in its first full year. The acquisition already performs at a very high level and reflects Vertu's first entry into the exciting British premium marque of Land Rover.


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Mergers & Acquisitions Grapevine is a weekly digest of M & A activity within the UK. It covers the past week, but is updated daily. It is a source of accurate and reliable information concerning UK Mergers & Acquisitions activity. The Mergers & Acquisitions Grapevine service contains much more than the standard free service, a sample of which is provided on this page, and is ideal for companies that wish to remain well informed about Mergers & Acquisitions, as well as those companies that would like to offer their products, services or consulting skills to organisations experiencing significant corporate changes. Companies undergoing mergers, performing acquisitions or divestments would obviously fit this description.

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The Competition Commission has ruled that the firm that bought GMG Radio for £70m in 2012 must sell eight stations in seven parts of the country to ease competition concerns. The acquisition, which involved the purchase of Real and Smooth stations in nine areas, would lead to advertising prices increasing in seven of the locations. The company must sell either Capital or Real XS, along with either Real or Smooth in the north west. The other parts of the country that are affected are the East Midlands, Cardiff and south Wales, north Wales, the north East, South and West Yorkshire, and central Scotland. London and the West Midlands were cleared. Before the deal was done, the company operated the Heart, Capital, LBC, Classic FM, Gold and Xfm brands across the UK, while Salford Quays-based GMG ran several stations under the Real or Smooth banners. The inquiry conducted by the Competition Commission found that, in each of the seven areas, the merger would mean the loss of either the only main competitor or one of the three main alternatives. These smaller advertisers would stand to lose most from this loss of rivalry. Requiring the firm to sell stations to new owners in the affected areas will preserve competition and protect these advertisers’ interests.

US drugs maker Actavis is to buy the Dublin-based drug firm in a deal worth $8.5bn (£5.6bn) including debt. As part of the deal, Actavis is offering $5bn in shares to investors. If the deal clears regulatory hurdles, the company will be based in Ireland. The Irish company has manufacturing facilities in Puerto Rico, Northern Ireland and Germany, and focuses on gastroenterology, women's healthcare and dermatology. The combined company would have annual sales of about $11bn. Actavis's drugs include treatments for deep vein thrombosis, asthma medication and attention deficit. The company has a manufacturing site in Devon. It is considered the combination is commercially and financially compelling, and reshapes the specialty pharmaceutical universe by creating a powerful global competitor. The takeover, expected to be completed by the end of 2013, has been unanimously approved by the boards of both companies and will generate substantial cost savings.

The crisp manufacturer based in Leominster is being placed on the market by Langholm Capital, the private equity firm backed by Unilever. It bought the company in 2008 for £40m. Since then it has expanded into emerging markets. The company targets the premium end of the crisp market, with hand-cooked, gourmet flavours. Financial advisor McQueen has been appointed to conduct the sale process. Potential buyers have been named as Kelloggs, Tangerine, and Calbee, a Japanese snack company.

An approach by a group of the founding shareholders regarding a possible takeover is not high enough, according to the mining company which has allowed the consortium more time to revise up its proposal. Major shareholder Alexander Machkevitch and fellow oligarchs Patokh Chodiev and Alijan Ibragimov announced last month that they were interested in taking over the company along with the government of Kazakhstan, who collectively own 54% of the firm. ENRC, which is also 26%-owned by fellow miner Kazakhmys, said that it received an indicative proposal from the consortium this week which "materially undervalued" the firm. While ENRC has not specified a price, Bloomberg reported that the founding shareholders are looking at an offer price of less than 300p per share compared to 275p before discussions were announced. ENRC has now given the consortium until June 3rd to either announce a firm intention to make an offer or walk away. "We believe the current proposal materially undervalues ENRC, and we will use the extension to seek an improved and formal proposal," said Mohsen Khalil, the Chairman of the independent committee of the ENRC board. "The independent committee is committed to serving the best interests of minority shareholders through a professional, transparent and rigorous process, which incorporates the highest standards and principles of independence and integrity." source sharecast

The Scotland-based manufacturer of polythene products, has acquired Cheshire-based Flexfilm and its Irish subsidiary, Jordan Plastics, for £5.5m. Flexfilm turned over £13.4m last year by selling film and printed bags to the food industry. It also serviced clients in the bedding, carpet, chemical, construction and agricultural sectors. Operating profits were £800,000. The deal is in line with the Scottish firm’s strategy to further strengthen its position in servicing the food sector and to focus on more resilient markets.

Supermarkets group Sainsbury lifted profits 6.2 per cent last year as it increased its market share to the highest level for a decade. The grocer has reached an agreement to take full ownership of its joint venture banking business, but did not address rumours about the potential impending departure of Chief Executive Justin King. Across the group, with total sales rising 4.6% to £25.6bn, underlying profits up 6.2% to £756m and earnings per share up 9.3% to 30.7p in the 52 weeks to March 16 2013, the grocer hiked its dividend 3.7% to 16.7p. An agreement was made with banking joint venture partner Lloyds Banking for the supermarket group to take full ownership of Sainsbury's Bank by acquiring Lloyds' 50% shareholding for £248m, comprising £193m cash and £55m of loan stock. The banking arm enjoyed a successful year, with Sainsbury's share of joint venture post-tax profit up 38% to £22m and an 8.0% increase in active customer accounts over the year. Strongly cash generative and growing fast, Sainsbury's believes taking full ownership of the bank will allow future products to be "even more tailored to Sainsbury's customers, leveraging Nectar data to drive sales uplifts in both financial services and the core supermarket business". Currently, around one in 20 supermarket customers holds a financial product with the bank and it believes there is a "significant opportunity to increase this" under full ownership. King said: "Our decision to take full ownership of Sainsbury's Bank will add further momentum to our strategy of developing complementary channels for the benefit of both customers and shareholders." Store numbers continued to climb, as Sainbury returned to a more "prudent and steady" rate of growth in its estate after a ceasefire was called in the supermarket "space race", with 14 new supermarkets and 87 convenience stores opened during the year and eight extensions to existing stores. The groceries online business grew at 20% year-on-year, with grocery orders regularly exceeding 190,000 per week - 25,000 more than the previous year. In non-food, sales of general merchandise and clothing grew at more than twice the rate of food over the year, topping £1.0bn in annual general merchandise sales for the first time. On the group's outlook, King said: "Whilst we see no near term change in the current economic situation, we remain confident that by continuing to invest in our long-standing strategy and by understanding and helping our customers, we are well positioned for future growth." For the new financial year Sainsbury said it anticipated like-for-like sales in a range of 1.0%-1.5%. Broker Shore Capital added that the group said it anticipated flat earnings margins for the current year, with cost savings of around £100m and around 2.5% cost inflation. Analyst Clive Black said the supermarket had made "a step in the right direction on capital expenditure" but would "benefit from a more judicious approach" like most of its competitors, "noting as we do that the retailer's net debt is growing after expansion capital expenditure and dividends". He said he expected King to "be around for a while longer yet" and retained a hold stance on Sainsbury's shares due to their "current slightly elevated valuations, dividend yield, free cash generation and strategic prospects". source sharecast

HICL Infrastructure Company has acquired a 33.3 per cent equity and loan note interest in a Scottish prison development for 10.3m pounds. The group purchased the HMP Addiewell Prison private finance initiative (PFI) project from Royal Bank Project Investments. The £74m PFI project was procured by the Scottish Prison Service to design, build, finance and operate a new maximum security prison at Addiewell, West Lothian, Scotland. Construction was undertaken by Interserve Project Services, a subsidiary of Interserve. Sodexo's arm Sodexo Justice Services is looking after operational services, including provision of custodial staff and lifecycle obligations. HICL paid a consideration in line with current valuations of similar UK PFI projects in the group's portfolio. The acquisition brings its total number of infrastructure investments up to 83. "We are delighted to reach agreement with the vendor and the Scottish Prison Service to acquire the Interest in the project, which we have been working on for a year," said HICL's Investment Adviser James O'Halloran. "Our due diligence has confirmed the high quality of the facilities and the excellent relationships that exist between the public and private sectors which have contributed to the strong operational performance." source sharecast

Travel group Thomas Cook has completed the sale of its North American business to Red Label Vacations. The business, which operates a tour operator and distribution network in Canada, was sold for £3.4m based on March exchange rates. The sale was made to allow the company to focus on its core segments and future growth

HICL Infrastructure has completed the acquisition of a 50 per cent equity and loan note interest in the Tameside General Hospital private finance initiative (PFI) project from Balfour Beatty. The £78m project was sold for £16m, generating a gain on disposal of £9.0m for Balfour. It reached final close in September 2007 and is for a term of around 34 years. The transaction brings HICL's total number of infrastructure investments to 82. Tony Roper, Director of InfraRed Capital Partners, HICL's Investment Adviser, said: "We are pleased to have completed this acquisition which was identified as part of the group's pipeline of new investment opportunities at the time of the company's recent successful equity capital raising. "InfraRed Capital Partners has worked with Balfour Beatty on a number of infrastructure projects in the UK. We look forward to working alongside our co-shareholder and supply chain to provide quality serviced facilities to the trust." Balfour Beatty also announced the sale of its 50% interest in four PFI school projects in Birmingham, Bassetlaw, Stoke and Rotherham to its co-shareholder, Innisfree, for combined proceeds of £42.5m, generating a gain on disposal of £24.4m. As such it generated total procees of £58.5m, exceeding the directors' valuation by £21.9m. Chief Executive Andrew McNaughton, said: "Balfour Beatty's ability to deliver long-term projects has enabled us to deliver superior returns from our equity investments while delivering a first class service to the public sector. The transactions we have completed demonstrate the quality and liquidity of our portfolio and are in line with our strategy to generate income from our Infrastructure Investments business through disposals, thereby releasing cash for future investments and delivering value for our shareholders." source sharecast

The industrial conglomerate which buys and sells manufacturing businesses, has agreed to dispose of its Truth Hardware division to AIM-listed building products group Tyman. Melrose said it would use the proceeds to pay down existing borrowings. Truth Hardware, which was first acquired as part of Melrose's takeover of engineering and manufacturing company FKI in 2008, designs and manufacturers components for North American producers of fenestration products including windows and patio doors. The division, which made an operating profit of $18.6m in 2012 on sales of $126m, is being sold to Tyman for a total consideration of $200m (£129m) and is payable in cash on completion. "We are very pleased with the progress Truth has made since our acquisition of FKI Plc in 2008 and we believe it is now well placed for the future," said Melrose Chief Executive Simon Peckham. "As planned at acquisition, we are disposing of Truth at the early stages of what appears to be a recovery in the United States housing market. Tyman is well positioned to add further value to the business and we wish them and Truth all future success." Tyman, formerly known as Lupus Capital, is an international supplier of building products to the door and window industries. The company said it sees this as a "strategic opportunity" to develop its position in the North America door and window components market. The firm is to fund the acquisition by a combination of a placing and open offer to raise £73m, a $100m new term loan and existing cash reserves. "The acquisition presents a number of substantial opportunities for Tyman and we look forward to growing our enlarged platform in North America to create an outstanding supplier for our customers and to deliver superior value for our shareholders in the future," said Tyman's Non-Executive Chairman Jamie Pike. source sharecast

Plastics and fibre company has completed its acquisition of Contego Healthcare as part of its strategy of complementing balanced, profitable organic growth with value-adding acquisitions. The group said the product portfolio complements its existing packaging solutions capabilities in the pharmaceutical and healthcare markets of labels, tear tape and authentication technologies. In a statement Filtrona said: "The acquisition will not only enhance the range and innovation opportunities offered to existing Contego and Filtrona customers, but also provide access for both companies to potential new customers through leveraging their combined skills. "In addition, through adding critical mass to the company in these end-markets and significant additional scale in western Europe, the acquisition of Contego provides opportunity for further development in both Porous Technologies and in speciality tapes through an expanded and more focused category-based commercial approach." Contego was acquired for £160m on a cash free, debt free basis and was funded in part a share placing equal to 9.99% of the company's issued share capital. source sharecast

The baker has bought garlic bread specialist Giles Foods. It is the first acquisition to be made by the fifth generation of the family firm, led by chairman and chief executive Jonathon Warburton. Giles Foods is a family firm with a £26m turnover that produces unbranded baked products including garlic breads, dough balls, French and Italian breads, Danish pastries, tarts and buns which are sold to retailers, restaurants, pub chains and caterers. It has 300 staff producing 137 product lines at two sites in Milton Keynes, Buckinghamshire and Warminster, Wiltshire. As well as being a family-run business, Giles Foods has a strong track record in innovation and anticipating the tastes and demands of consumers. The company will run Giles Foods Limited as a separate business, with the current management team remaining in place. David Rixon is Managing Director of Giles Foods.

A training academy has been launched at the technology park in Warwickshire and Leicestershire as part of a bid to create 2,000 jobs by 2020. The Nuneaton-based vehicle engineering consultancy wants to use the academy to train staff and support future workers. More than 100 training courses and work experience placements will be offered. The first part of the £50m technology park was opened in November 2012. It is expected to train 10,000 people, including school leavers, apprenticeships, graduates, masters students, and PhD candidates over five years. Since 2010, 188 jobs have been created and the consultancy expects a further 145 jobs to be created this year. The firm's chief executive, Dr George Gillespie, expects that finding prospective workers for the projected 2,000 jobs will be a challenge. It needs to get into schools and inspire the next generation of children to consider moving into engineering as an exciting, rewarding career choice. There are issues around developing the skills and the number of staff of the future. The academy comes together to try and approach both of those things.

The digger manufacturer has bought a hotel in Uttoxeter which it intends to use to accommodate staff and visitors. The firm is spending around £1m in buying and refurbishing the Travelodge hotel, on the A50. The deal is expected to go through in May, after which the company will revamp the 32-room hotel. The company intends to use the hotel for UK and overseas staff to its world headquarters at nearby Rocester. It will also accommodate undergraduates completing their year in industry at the company and dealer staff attending training courses. As the company forges ahead with its ambitious global growth programme, it has an increasing number of people visiting the world headquarters and the nearby International Training Centre, as well as a growing number of graduates and undergraduates joining the business. Alan Thomson is property director for the group.

An industry-led apprenticeship programme to boost training opportunities in food and farming and help young people develop careers in agriculture is being launched. EDGE Apprenticeships in Food and Farming brings together a number of leading organisations to Educate, Develop, Grow and Employ (EDGE) young people in agriculture across the east of England. The programme is supported by just over £1.4m of investment from the UK Commission for Employment and Skills (UKCES). It aims to encourage employers across Suffolk and Norfolk to take on apprentices and equip them with the practical, managerial and technical skills required to develop successful careers in farming and food production. The programme is industry-led and is a collaborative venture between farmer co-operatives Anglia Farmers and AtlasFram Group, in conjunction with Easton and Otley College, New Anglia Local Enterprise Partnership (LEP), Norfolk County Council and Suffolk County Council. The application for funding was made in autumn 2012 in response to concerns from Anglia Farmers and AtlasFram Group members about the widening skills and age gaps in the industry. Many members had experienced difficulties finding young people with suitable skills to replace staff who were retiring, leading to an increasingly ageing workforce. EDGE Apprenticeships in Food and Farming will offer training across a wide range of careers, both on-farm and in associated agri-science and agri-business roles. Classroom-based training for apprentices will be provided by Easton and Otley College and other appropriate training bodies. Richard Anscombe is chief executive at AtlasFram Group. Martyn Davey is Director of Land-based Studies at Easton and Otley College.

A new £3.25m computing facility at the Yorkshire university seeks to make it easier for businesses in the region, particularly small- and medium-sized enterprises (SMEs), to carry out complex computer modelling and other big data challenges. The new N8 High Performance Computing (N8 HPC) centre provides access to a high performance computing facility for the Universities of Durham, Lancaster, Leeds, Liverpool, Manchester, Newcastle, Sheffield and York – an established collaboration that collectively form the N8 Research Partnership – and their industry partners. The N8 HPC, which is funded by the Engineering and Physical Science Research Council, aims to lower the barriers to industry use of high performance computing by offering firms easy access to the facilities, alongside consultancy and e-infrastructure training. Based at the university in Leeds and run jointly with Manchester University, N8 HPC operates Polaris, one of the 250 most powerful computers in the world and which is capable of a peak performance of 110 trillion operations per second – the approximate equivalent to half a million iPads. Professor David Hogg is N8 HPC co-director and Pro-Vice-Chancellor for innovation and research at the university.