Professional services firms advise on majority stake in Riviera Travel

20 December 2017 Consultancy.uk

Silverfleet Capital has confirmed that it will take a majority stake in escorted tours operator Riviera Travel. The deal, which was advised upon by Alvarez & Marsal, Parthenon-EY, Deloitte, PwC, AJ Gallagher, Ropes & Gray, Harris Williams and Intuitus, will conclude for an undisclosed fee, following approval from regulators.

Founded in 1984, the Burton-on-Trent-based tourist company Riviera has become a leading operator of escorted tours in the over-55s market. The group provides European tour holidays, river and ocean cruises, city excursions, and long-haul tours with varied itineraries. Their offering attempts to combine leisure with education and entertainment. However, Riviera has recently been looking to diversify its range of holidays beyond the currently offered tours and cruises in 50 destinations. The firm presently attracts over 118,000 customers per year, reporting a £9.2 million profit in 2015 on turnover of £126 million in its most recent set of available accounts.

Despite this success, the firm remained hungry for further expansion, and, less than three years after founder Michael Wright sold a majority stake to Phoenix Equity Partners – valuing the operator at £120 million – the new majority owner hired the professional services firm PwC to find new investors. Now, in a transaction that will see fresh funds injected into the company, Silverfleet Capital has agreed to acquire a majority stake in Riviera Travel. While no financial terms were disclosed, the company has been tipped for as much as £250 million, when ‘For Sale’ signs first went up in June 2017.Consultancies advise on majority stake in Riviera TravelGlobal private equity firm Silverfleet, which specialises in buy-to-build, has entered into a binding contract to acquire a majority stake in Riviera. This transaction represents the sixth investment completed by Silverfleet in its current fund, and the second within Retail, Leisure & Consumer, a sector where the firm has been investing since 1990. Silverfleet’s current portfolio companies are based in Denmark, Norway, France, the UK and Germany. The Silverfleet Capital team that worked on the transaction included Gareth Whiley, Mark Piasecki, Robert Knight, Sumit Dheir and Adam Ahern, who are based in Silverfleet’s London office.

In terms of external involvement, having been brought in by Riviera to find new investors, PwC also advised on the buy-side of the deal, providing data-analytics services to Silverfleet, alongside Big Four rival Deloitte, who provided debt advisory. Meanwhile, Alvarez & Marsal supplied financial and tax advice, and strategy consultancy Parthenon-EY supported the deal with commercial advisory work. Firms also involved on the buy-side included Ropes & Gray, who provided legal, corporate and banking services, Harris Williams, who supplied M&A advisory, Intuitus, who supported IT services, and AJ Gallagher, who worked on the deal’s insurance aspects.Those involved in dealGareth Whiley, Partner at Silverfleet Capital with responsibility for Silverfleet’s investments in the Retail, Leisure & Consumer Sector said, “Riviera is a high quality, well-established business with a strong brand and value proposition. Silverfleet has long been attracted to the travel sector and the growing demographic that Riviera serves. We are excited by the prospect of working closely with the highly experienced management team and using our knowledge of the sector to help Riviera continue to develop its brand and customer base.”

David Clemson, CEO of Riviera added, “Riviera is now positioned as a premium tour operator for the over 55 year old consumer. Having managed the development of the business over the past nine years, I look forward to leading Riviera through its next phase of growth. Silverfleet Capital is a partner that comes with a significant and longstanding reputation for helping European businesses grow. I have known Gareth and the team for a long time and am convinced that with their support and substantial experience in the consumer sector we can successfully achieve our goals and develop the company further.”

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Private equity firms ramp up sustainability focus

19 April 2019 Consultancy.uk

In line with business leaders across the industrial gamut, private equity firms are increasingly on board with sustainability projects. According to a new study, the investment arms for major funds are implementing a number of strategies aimed at supporting sustainable economic development in line with global goals.

While the business world has finally begun to acknowledge the danger of climate change, effective action plans remain difficult to achieve. The Paris Agreement has stipulated a clear target for the decades leading up to 2100, although massively reducing emissions while not crashing the economy could be a tall order.

Businesses that are able to acquire capital can use it to boost productivity and output, thereby creating a virtuous cycle of development. However, some businesses are better able to utilise resources than others, both in terms of their relative productivity, as well as the value of the respective outcomes relative to costs (including environmental harms). Financing can therefore provide an avenue to select businesses that are aligned with various global sustainability goals, while shunning those that drive little or unsustainable social value creation.

Top moves made by investment arms towards responsible investment

Profit has for the longest time been the central criterion for investment decisions. Yet profit at any cost is increasingly seen as creating considerable social harms, while often delivering only marginal value. As a result, the private equity sector, which was initially sluggish to change its ways with regards to sustainability, has started to see the topic as an opportunity as much as a challenge.

A new study from PwC has explored how far sustainability goals have become part of the wider investment strategy for private equity (PE) firms. The report is based on analysis of a survey of 162 firms and includes responses from 145 general partners and 38 limited partners.

Maturing sustainability

Top-line results show that responsible investment has become an issue for 91% of respondents. For 81% of respondents, ESG (environmental, social, and corporate governance) was a board matter at least once a year, while 60% said that they already have implemented measures to address human rights issues. Two-thirds have identified and prioritised Sustainable Development goals that are relevant to their investment segments.

Change in concern and action on climate-related topics over time

While there is increasing concern around key issues, from human rights protections to environmental and biodiversity protection, the study finds there are mismatches between concern and action. For instance, concern among investment vehicles around climate change has increased since 2016.

In terms of risks to the PE firm itself, concern has increased from 46% of respondents in 2016 to 58% in the latest survey. However, the number who have taken action remains far below those concerned, at 9% in 2016 and 20% in 2019. Given the relatively broader scope of investment opportunities, portfolio companies face higher risks – and more concern – from PE professionals, at 83% in the latest survey. However, action is less than half of those concerned, at 31%.

Changing climate

In terms of the climate footprint of the portfolio companies, 77% of respondents state concern in the latest survey. 28% of respondents are taking action through the implementation of measures to mitigate their concerns.

Concern and action taken on ESG issues

In terms of the more pressing issues for emerging responsible investment or ESG issues, governance concern of portfolio companies comes in at number one (92% of respondents), while 60% have taken action on it. Firms have focused on improving awareness – setting up policies and a range of training modules for their professionals around responsible investment decision making. Cybersecurity takes the number two spot, with 89% concerned and 41% implementing strategies to mitigate risks.

Climate risks take the number three spot in terms of concern for portfolio companies (83%), but falls behind in terms of action (31%). Health and safety track records are a key concern at 80% of businesses, with 49% implementing action. Gender imbalance within PE firms themselves ranks at 78%, which is being dealt with by 31%. A recent survey from Oliver Wyman showed that there is gender balance at 13% of GP teams in developed countries.

Biodiversity is also an increasingly pertinent topic, with risks from pollution and chemical use increasingly driving wider systematic risks around environmental outcomes. It featured at number eight on the ranking of most likely global risks for the coming decade, with its impact at number six. As it stands, biodiversity is noted as an issue at 57% of firms, with 15% implementing action.