Corporate finance and M&A advisors compete for Yorkshire Awards

13 November 2017 Consultancy.uk

The Mergers and Acquisitions (M&A) scene of Yorkshire is performing well at present, with the region’s businesses completing over 300 deals worth around £4 billion over the last year. In order to celebrate the booming industry’s achievements, the Yorkshire Dealmakers Awards have announced the shortlist for their annual award ceremony, which features 11 professional services firms.

Prior to 30th September, Yorkshire dealmakers completed a huge 326 M&A transactions, with an accumulative deal value of £4 billion. This represented an uptick of 43% from last year’s £2.8 billon haul, and was in-keeping with a Europe-wide trend that saw deal volume decrease, while value increased.

The number of deals being undertaken in Yorkshire has dropped dramatically, by as much as 27% per cent, down from the 447 completed during the same period in 2016. Despite this, year-on-year deal values rose to £4 billion. The £750 million acquisition of vehicle leasing business Zenith Group by private equity group Bridgepoint is the biggest deal so far this year, followed by the recent QHotels deal.

Professional services firms, particularly from the Big Four, performed well in the regional market. Deloitte topped the financial advisor table in terms of volume, having worked on nine deals. PwC, Grant Thornton, KPMG and Dow Schofield Watts made up the top five. In terms of value, however, KPMG was top, having worked on deals worth £1.4 billion – over a quarter of Yorkshire’s total deal value. Both KPMG and Deloitte were involved in the largest deal of the year – that of Zenith’s £750 million acquisition by Bridgepoint – along with EY, L.E.K., OC&C, Evercore, Weil Gotshal & Manges, Sidley Austin, Squire Patton Boggs, Investec, White & Case, ERM, HSBC, RBS and Lloyds.

Deloitte - PwC - KPMG - Mazars and EY

In order to celebrate the achievements of Yorkshire’s dealmakers, after another bumper year, the Yorkshire Dealmaker Awards are set to commemorate corporate finance advisors, investment bankers, private equity group, law firms, M&A consultants and tax advisors, at their annual ceremony. Some 11 consulting and professional service firms are listed for accolades, alongside top private equity, law and corporate finance firms.

Insider Media’s Yorkshire Dealmakers Awards have been a part of Yorkshire's corporate finance community calendar since 1999, and the ceremony to announce the winners will take place in Leeds’ New Dock Hall on 23rd November.

Leading the charge for the professional service industry were Deloitte, with six nominations, followed by PwC on four, and KPMG and Mazars on three each. Mazars are a particularly well-known brand in the region, thanks in part to their continued sponsorship of the kit of the Yorkshire County Cricket team – the most successful club in English history. Other firms who made the cut were EY, OC&C, Grant Thornton, RSM, LEK, and corporate finance firms Livingstone Partners and Sentio.

Top deals

In the category for Deal of the Year worth over £25 million, the previously mentioned Zenith deal will compete with the acquisition of MKM by Bain Capital, advised on by PwC, and also including OC&C, alongside Rothschild, Addleshaw Goddard, Moelis & Company, Ropes & Gray. Another deal involving PwC is also up for the award, with the B&M acquisition of Heron Foods, advised by Deloitte, Merrill Lynch, Addleshaw Goddard, Gordons, and Andrew Jackson vies for recognition, along with the Pelsis Managerial Buy Out (MBO), which again involved Deloitte, alongside LDC, Squire Patton Boggs, Walker Morris, Park Place, BlueBay Asset Management and RBS.

OC&C,RSM, Grant Thornton, LEK, Livingstone Partners, Sentio

For Deal of the Year worth under and up to £25 million, however, the Big Four saw its presence reduced, with mid-market players less inclined to pay their up-scaled fees, and opting more often for their smaller competitors. While KPMG were again represented for the Sewtec MBO deal – which also involved Endless, Squire Patton Boggs, Mazars Corporate Finance and Gordons – and PwC were involved in the Clearly Drinks MBO, alongside Grant Thornton, NorthEdge, Bond Dickinson, CIL, Henderson, Syngroup, Livingstone Partners, DWF and Saffery Champness, two deals involved none of the gang of four. The Sirdar acquisition, advised on by RSM along with BlueGem Capital Partners, Squire Patton Boggs, and the Bridge acquisition involving work from DSW, Walker Morris, did not engage with any of the world’s largest advisories.

KPMG and PwC did return to the nominations with the Exit of the Year category, however. The Go Outdoors – YFM exit involved KPMG and Addleshaw Goddard, while the MKM – 3i and LDC exit saw PwC and strategy consultants OC&C work with Rothschild, Addleshaw Goddard, Moelis & Company and Ropes and Gray.

National/International Deal of the Year meanwhile saw Deloitte and Mazars add to their nominations. The Pelsis MBO saw Deloitte work with LDC, Squire Patton Boggs, Walker Morris, park Place, BlueBay Asset Management and RBS, while Mazars were commended for their work alongside Squire Patton Boggs for the Scotch Frost acquisition.

Teams and individuals

The Corporate Finance Advisory Team of the Year shortlist saw Deloitte joined by corporate finance firm Sentio, as well as Rothschild and DSW. A Deloitte employee was also nominated for the Dealmaker of the Year award, with Dan Renton, director in the Corporate Finance arm of the firm going up against Mazars M&A partner Rob Burton, Dan Sheahan, managing director at Investec Bank and Stephen Griffiths, managing director at Rothschild for the honours.

Grant Thornton added to their awards night presence with a nomination for Emerging Dealmaker of the Year. Duncan Morpeth, associate director at Grant Thornton was shortlisted alongside Dan Smith, investment manager at LDC, and Amy Wells, assistant director at Rothschild.

×

8 tips for successfully buying or selling a distressed business

18 April 2019 Consultancy.uk

Embarking on the sale of a business is one of the most challenging experiences a management team can undertake. Even serial dealmakers acknowledge that the transaction process can be gruelling, exposing management to a level of scrutiny and challenge through due diligence that can be distinctly uncomfortable.

So, to embark on a sale process when a business is in distress is twice as challenging. While management is urgently trying to keep the business afloat, they are simultaneously required to prepare it for scrutiny by potential acquirers. Tim Wainwright, an experienced Transactions Partner with Eight Advisory, says that this dual requirement means sellers of distressed businesses must focus on presenting their business in a way that supports buyers in identifying value, whilst simultaneously being open about the causes of distress. 

According to Wainwright, sellers of distressed businesses should focus on eight key aspects to ensure they are as well prepared as possible:

  • Cash: In a distressed situation cash truly is king. Accurate forecasting and day-by-day cash balances are often required to ensure any buyer is confident that scarce cash reserves are under proper control. 
  • Equity story and turnaround plan: Any buyer is going to want to understand the proposed turnaround strategy: how is the business going to enact its recovery and what value can be created that means the distressed business is worth saving? Clear presentation of this strategy is essential.
  • The business model: Clear demonstration of how the business model generates cash is required, with analysis that shows how financial performance will respond to key changes – whether these are positive improvements (e.g., increases in revenue) or emerging risks that further damage the business.  Demonstrating the business is resilient enough to cope with these changes can go a long way to assuring investors there is a viable future.
  • Management team: As outlined above, this is a challenging process. The management team are in it together and need to be consistent in presenting the turnaround. Above all, the team needs to be open about the underlying causes that resulted in the distressed situation arising.  A defensive management team who fail to acknowledge root causes of distress are unlikely to resolve the situation.

8 tips for successfully buying or selling a distressed business

  • Financing: More than in any traditional transaction, distressed businesses need to understand the impact on working capital. The distressed situation frequently results in costs rising as credit insurance becomes more difficult to obtain or as customers and suppliers reduce credit. Understanding how these unwind will be important to the potential investors.
  • Employees: Any restructuring programme can be difficult for employees. Maintaining open communications and respecting the need for consultation is the basic requirement. In successful turnarounds, employees are often deeply engaged in designing and developing solutions. Demonstrating a supportive, flexible employee base can often support the sale process.
  • Structuring: Understanding how to structure the business for the proposed acquisition can add significant value. Where possible, asset sales may be preferred, enabling buyers to move forward with limited liabilities. However, impacts on customers, employees and other stakeholders need to be considered.
  • Off balance sheet assets: In the course of selling a distressed business, additional attention is often given to communicating the value of items that may not be fully valued in the financial statements. Brands, intellectual property and historic tax losses are all examples of items that may be of significant value to a purchaser. Highlighting these aspects can make an acquisition more appealing.

“These eight focus areas can help to sell a distressed business and are important in reaching a successful outcome, but it should be noted that it will remain a challenging process,” Wainwright explains. 

With recent studies indicating that the valuation of distressed business is trending north. With increased appetite from buyers who are accustomed to taking on these situations, it is likely that more distressed deals will be seen in the coming months. “Preparing management teams as best as possible for delivering these will be key to ensuring these businesses can pass on to new owners who can hopefully drive the restructuring required to see these succeed,” Wainwright added.