Mergers & Acquisitions Grapevine
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This section provides a summarised live selection of the latest Mergers & Acquisitions activity.
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.
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 Private Equity firm announced that it has received a binding offer from funds advised by BC Partners for Allflex Holdings, its largest investment. The offer, which values Afflex at over $1.3bn, would result in gross proceeds to Electra of $398m. Approval must now be sought from the relevant works council in France and several other regulatory bodies. 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.
The telecoms regulator has announced the winners of its 4G mobile auction, which could see mobile phone users enjoying superfast download speeds. The winning bidders will pay £2.34bn for the spectrum, which is less than expected. The winners are Everything Everywhere, Hutchison 3G UK, Niche Spectrum Ventures - a BT subsidiary, Telefonica, and Vodafone. It is estimated that 4G will provide UK consumers with £20bn of benefits over the next 10 years.
The budget hotel chain has sold the freehold of its 102-bedroom hotel on Manchester Street in Oldham. Riddle Hotels has bought the freehold, which was among a clutch of sites put up for sale by the chain in 2012. The Oldham site was leased to the hotel chain, and was owned by Piccadilly Hotels. The sale of the freehold attracted a number of bids. The deal was brokered by the Manchester office of specialist property adviser Christie + Co. Sharon Riddle is a director at Riddle Hotels, which has been looking to acquire a hotel for some time.
Proposals to build a solar panel farm in Suffolk have been rejected by planners at the local authority. Hive Energy wanted to create a 25 megawatt development at Church Farm in Hacheston covering a 127 acre (51 hectare) site. The council's planning committee turned the idea down after objections from parish councils. Objections concerned the size and the visual impact it would have on grade II-listed buildings in the village, because the solar panels won't be hidden. Existing drainage pipes under the field would be destroyed to make way for the panels, causing in flooding concerns. Giles Redpath is chief executive officer for Hive, who will be reviewing its options.
The Hampshire-based company which supplies valves linked to fuel flow through sections of the Boeing 787 Dreamliner is to be inspected by Japanese safety officials. They will insprect the US-based company's components as part of the investigation into what caused fuel leaks on a Dreamliner operated by Japan Airlines. The company is supporting the investigation, and has confirmed that it supplies pumps and valves to Dreamliner aircraft. All 50 Dreamliners in service have been grounded and Boeing has suspended delivery of further 787 aircraft.
The business services group was appointed by the Petrol Retailers' Association to carry out a study into the effect of supermarket petrol stations on independent forecourts. The study found that an average of 40 supermarket forecourts were granted planning permission each year since 2009. It is considered that, if applications continue at the same rate, there will be another 160 supermarket sites by the end of 2016. It is claimed that every new supermarket site is taking the equivalent volume of five independent retailers out of the market. It is estimated that this could result in the loss of 1,000 independents over the next four years.
The Scottish media group has been awarded by the broadcasting regulator, Ofcom, licences to run digital terrestrial television (DTT) channels in Glasgow and Edinburgh for up to 12 years. The company teamed up with Edinburgh Napier University and Glasgow Caledonian University to launch its bid to create Edinburgh TV (ETV) and Glasgow TV (GTV) in August 2012. GTV and ETV will provide an innovative television service to the communities they serve, complementing the company’s existing broadcast, online and mobile services. The new ventures will also provide media students with opportunities to work and learn in a live broadcast environment. Ofcom has now handed out 13 local television licences, having invited applications covering 21 areas last year, and said it will make further awards over the coming months.
The communications regulator has named seven bidders for the upcoming auction of bandwidth for 4G mobile broadband services. Among the bidders are all of the major existing UK mobile operators, as well as Hong Kong conglomerate PCCW and UK network supplier MLL Telecom. The telecoms regulator has stated that the auction will increase the amount of airwave available for mobiles by more than 75%. The auction is due to start in January 2013, with licences granted by March and services launching in May and June. The complete list of bidders is: Everything Everywhere, which has already been permitted to launch the UK's first 4G service using existing bandwidth and did so on 30 October; PCCW, a major Hong Kong conglomerate, operating through its subsidiary HKT UK; Hutchison Whampoa, another Hong Kong conglomerate and operator of the 3 network; MLL Telecom, a telecom network supplier founded in 1992 and based in Marlow, Buckinghamshire; BT, via its subsidiary "Niche Spectrum Ventures"; Telefonica, the Spanish incumbent telecoms company that owns the O2 network; and finally Vodafone. It is considered that the new 4G services will stimulate investment, growth and innovation in the UK, and deliver significant benefits to consumers in terms of better, faster and more reliable mobile broadband connections. ," said Ed Richards, Ofcom's chief executive.
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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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