M&A team of OC&C advises on sale of Aston Manor and Wagamama

13 November 2018 Consultancy.uk

Two major transactions have seen the Japanese dining chain Wagamama and UK cider maker Aston Manor change hands. Both deals saw strategy consulting firm OC&C advise on the sell-side.

As the casual dining sector endures a troubled 2018, Wagamama, a British restaurant chain serving Japanese cuisine, has been sold to Frankie and Benny owner The Restaurant Group. The first Wagamama was opened in 1992 in Bloomsbury, London, and has since spread to further locations in Austria, Bahrain, Belgium, Bulgaria, Cyprus, Denmark, Gibraltar, Greece, Ireland, Italy, Malta, the Netherlands, New Zealand, Oman, Qatar, Slovakia, Spain, Sweden, Turkey, the UAE, and the United States.

According to UK newspaper The Times, The Restaurant Group beat private equity firms for a sale that was launched in June by Goldman Sachs on behalf of Duke Street, Wagamama’s private equity backer. Now, the “transformative” £559 million takeover of the Wagamama chain will see the UK-headquartered corporation assume Wagamama’s net debt of £202 million.

Commenting on the transaction, Andy McCue, Chief Executive of The Restaurant Group, described the Wagamama deal – which is expected complete by mid-December – as "an exciting and transformative opportunity.”

Wagamama’s former owners Duke Street and Hutton Collins were advised on the transaction by OC&C Strategy Consultants, supporting the private equity investors through vendor due diligence, as well as providing strategic support as the business considered alternative International growth options. The team that led the engagement were David Sinclair (Partner), Tim Cook (Partner) and Katherine Fiander (Associate Partner).

M&A team of OC&C advises on sale of Aston Manor and Wagamama

Elsewhere, cider maker Aston Manor has become the latest UK company to be purchased by overseas investors, following a drop in the value of the pound, which has delivered extra value to purchasers in the US and EU in particular. The British firm was established in 1983, by late Aston Villa Chairman Sir Doug Ellis, and has since become the largest independently owned cider maker in the UK. The group now exports a range of ciders to more than 20 countries including the US, Russia and a number of countries in Africa.

The purchaser, Caen, France-based Agrial, is a farming and food co-operative which has regularly expanded since its creation to become one of the leading French farming co-operatives. Today it is present across Europe, Africa and the United States, while its beverage division operates in a number of sectors, both alcoholic and non-alcoholic and is France’s largest producer of cider.

Aston Manor’s CEO, James Ellis, said of the move, “This deal will provide both the company and our staff with continuing opportunities to grow. Agrial is the perfect fit and we are delighted to build Aston Manor’s future with them.”

OC&C Strategy Consultants supported Aston Manor on its sale to Agrial Group. OC&C Partners David de Matteis and Will Hayllar provided Aston Manor with vendor due diligence, leveraging their expertise in the alcoholic drinks sector. According to a statement from OC&C, the firm boasts extensive experience in the drinks sector stretching across global brand and private label leaders to emerging and disruptive brands.


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.