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M&A Deal Directory 2003 Back  
Deals in excess of €100m
Rambridge Limited
Acquirer: Rambridge Limited (Liam Carroll)
Target: Dunloe Ewart plc
Acquirer advisor: NCB Corporate Finance
Target Advisor: Davy Corporate Finance Limited
Acquirer legal advisor: Eugene F. Collins
Target legal advisor: Mason Hayes & Curran
Origin of target: Irish
Origin of acquirer: Irish
Date of announcement: 25/10/02 (First Offer by Valdot)
Date of completion: 20/12/02 (Offer by Rambridge declared unconditional)
Consideration: €200 million

NCB Corporate Finance advised Rambridge Limited/Liam Carroll on the acquisition of Dunloe Ewart. NCB Corporate Finance’s role encompassed the following:
• Review of information provided by the vendor
• Assistance in negotiations with key shareholders
• Obtaining irrevocable commitments from key shareholders to accept the offer
• Assistance in obtaining bank facilities
• Obtaining recommendation from the Board of Dunloe Ewart
• Preparing offer documentation
• Making offer on behalf of Rambridge
• Completing the offer process
Rambridge’s offer finally unlocked value for shareholders in a situation where there had been a long period of illiquidity in the share.

Profile by: Fergus McLoughlin, director at NCB Corporate Finance.

The outcome of the perceived shareholder stand-off in Dunloe Ewart had attracted much media attention over a period of 2 years. An initial attempt by Dunloe Chairman Noel Smyth to privatise the company in 2000 had been frustrated by the significant stake built up in the company by reclusive property developer, Liam Carroll.

This situation had remained into 2002 with neither of the major shareholders communicating with each other on a common vision for how Dunloe should be brought forward. Matters came to a head in September, when Smyth’s plans to buy out the joint -venture partner in the Cherrywood properties were defeated. Something needed to break and did in October when Smyth launched his own offer to buy the company at 42.5c per share. This was recommended by the independent directors on the basis that it was likely to break the logjam and likely to encourage a higher offer. This duly happened when following some active share purchases it was clear that Smyth’s offer could not succeed. Following consent from the Takeover Panel Smyth sold his Dunloe shares at 45c which cleared the way for the offer by Rambridge at 50c per share. With irrevocable undertakings from approximately 80 per cent of the shares in issue, this offer was successful and brought to an end this long running saga.

Profile by: Ivan Murphy, director in Davy Corporate Finance.

Acquirer: Musgrave Group plc
Target: Budgens plc
Acquirer advisor: AIB Corporate Finance / Hawkpoint Partners
Target Advisor: Dresdner Kleinwort Wasserstein
Acquirer legal advisor: Arthur Cox / SJ Berwin
Target legal advisor: Herbert Smith
Origin of target: UK
Origin of acquirer: Ireland
Date of announcement: 21/06/02
Date of completion: 31/06/02
Consideration: stg?167 million

In August 2000, Musgrave acquired approximately 28 per cent of the share capital of Budgens plc and approximately 99 per cent of the convertible loan stock, giving it an interest in approximately 43.5 per cent of the fully diluted share capital.

In June 2002, Musgrave announced the terms of a recommended cash offer of 135 pence per share for the 72 per cent of the share capital of Budgens plc not already owned. The value of the offer for the outstanding 72 per cent amounted to stg?167 million.

The offer valued the entire issued share capital of Budgens at about stg?231.6 million and represented a premium of 18.7 per cent to the price before the offer was announced and 28.2 per cent over the average price for the preceding six months.

Musgrave’s initial strategic investment represented its first entry into the grocery retailing market in Great Britain. Since that time, close working relationships have been developed between Musgrave and Budgens, at both board and operational levels. The acquisition provides a sound base from which Musgraves can develop its position in the grocery retailing market in Great Britain.

Developing the appropriate funding structure and selecting the lead arranger of the banking syndication were critical parts of the transaction. This activity was led by AIB Corporate Finance /Hawkpoint Partners and took a number of months to complete. The acquisition finance was provided by a syndicate of banks, arranged by Barclays Capital and underwritten by Barclays, AIB, Bank of Ireland, IIB and Ulster Bank. It is expected that the merger will be completed by the end of the first quarter of 2003.

Profile by: Ronan McGovern.

Acquirer: VNU NV
Target: Golden Pages Limited (63 per cent)
Acquirer advisor: AIB Corporate Finance/Ernst & Young
Target advisor: Not available
Acquirer legal advisor: Eugene F. Collins
Target legal advisor: A&L Goodbody Solicitors
Origin of target: Ireland
Origin of acquirer: Netherlands
Date of announcement: 02/05/02
Date of completion: 05/02
Consideration: e185 million

On 2 May 2002 VNU, a leading international media and information company, announced that it had reached an agreement to increase its interest in Golden Pages, its directories affiliate in Ireland, from 37 per cent to 100 per cent for €185 million. Eircom had owned the remaining 63 per cent of Golden Pages.

In 2001, Golden Pages realised net revenues of €61.5 million and EBITA of €24.5 million, excluding management fee. The EBITA multiple was 11.2 for the transaction.

The acquisition is a very attractive opportunity for VNU given the substantial organic revenue growth potential of the business. VNU expects to be able to drive further growth in the operating income of Golden Pages as a result of acquiring full control of the company. The acquisition strengthens VNU’s portfolio and is in line with their objective of increasing ownership and control of the directories affiliates that it does not wholly own, when attractive opportunities arise.
Golden Pages has more than 30 years of directories publishing experience in Ireland. The company annually publishes the White Pages Phonebook and six Yellow Pages directories with an annual circulation of 3.6 million copies. The company employs about 280 people.

Profile by: Ronan McGovern.

VNU held a 37 per cent stake in Golden Pages and acquired the remaining 63 per cent from Eircom in 2002.

The publication of directories is one of VNU’s three core activities together with market research and business media. The Golden Pages division produces the phone book and six golden pages directories in the Republic with an annual circulation of 3.6 million copies. VNU’s increased stakes in the directories business to 100 per cent is in line with its continued strategy to turn its attentions away from consumer magazine publishing towards business service.

The deal was financed through a share placement, which was coordinated by Merrill Lynch and ABN AMRO. Ernst & Young provided due diligence services to VNU.

Profile by: Sinead Munnelly.

Legal & General Ventures
Acquirer: Legal & General Ventures Limited
Target: IWP’s Household Products Division
Acquirer Adviser: None
Target Adviser: Goodbody Corporate Finance
Acquirer Legal Adviser: Ashurst Morris Crisp
Target Legal Adviser: Arthur Cox
Origin of Target: Ireland/UK
Date of Announcement: 02/07/02
Date of Completion: 09/02
Consideration: €134.2 million

IWP’s Household Products Division, which was principally made up of the former Jeyes Group plc, had been acquired by IWP in 1998 and its main products included bleach, liquid and automatic toilet cleaners, haircare, insecticides and aircare.

Its operations are based in the UK, Germany and Holland. Following a strategic review, IWP decided that the household products division required significant investment in capital expenditure, R&D, sales and marketing if it was to establish a proper platform with which to grow going forward. Given IWP’s high gearing levels, it was clear that IWP did not have the financial resources available to undertake such investment.

It was also decided that a disposal of the division would succeed in releasing financial resources, which would help to significantly alleviate the level of gearing. Goodbody Corporate Finance was mandated by the board of IWP to seek out potential interested parties to acquire the household products division.

Given the stated strategy of multinationals such as Unilever and P&G to concentrate their resources on a limited number of ‘global’ brands, it quickly became apparent that a financial buyer was the most likely candidate given the division’s historic growth rates and cash generative nature. We approached five separate private equity houses who had a track record of investing in consumer products companies and following an initial due diligence period IWP received 5 different proposals.

Based on these proposals, Legal & General Ventures (LGV) was selected as the preferred party. One of the main attractions of the proposal from LGV was not only the headline price but also the fact that its proposal was structured in such a way, which offered IWP the opportunity to maintain a significant shareholding in the Household Products Division going forward.

Following three months of extensive due diligence and negotiations with LGV, the disposal to a joint venture formed by LGV (44 per cent), IWP (35 per cent) and the management team (21 per cent) was announced for a total consideration of €134.2 million. In addition to its 35 per cent shareholding, IWP also received e101 million in cash and €32.5 million of deep discount bonds in the JV with a coupon of 12 per cent p.a. This leveraged buy-out was funded by way of €85 million of bank debt, €62 million of deep discount bonds and €2 million of equity.

By undertaking this transaction, IWP succeeded in reducing its gearing, concentrating its management and financial resources on its higher margin personal care business and also maintaining the opportunity to share in the future growth of the household products division via its ongoing shareholding.

Profile by: Bobby O’Brien, director in Goodbody Corporate Finance.

Acquirer: GEHE AG
Target: Unicare Pharmacy Group
Acquirer advisor: Self-advised
Target Advisor: Merrion Corporate Finance
Acquirer legal advisor: Whitney, Moore & Keller
Target legal advisor: McCannFitzGerald
Origin of target: Irish
Origin of acquirer: German
Date of announcement: 10/01
Date of completion: 06/02
Consideration: e120 million

Merrion Corporate Finance acted as advisor to the pharmacy chain Unicare on its €120 million disposal to GEHE AG, Europe’s largest retailer and distributor of pharmaceutical products. Unicare is comprised of 30 retail pharmacy outlets trading in the greater Dublin area and a number of provincial towns.

Merrion was engaged by Unicare’s owners to negotiate the consideration receivable and the other terms and conditions relating to the sale of their businesses. In addition, Merrion project managed the transaction through to completion. The work undertaken by Merrion included the negotiation of a letter of intent setting out the principal terms and conditions on which the transaction was to be effected, advising Unicare’s owners in relation to valuation and instructing / co-ordinating the input of other specialist legal (provided by McCannFitzGerald) and taxation (provided by KPMG) advisers.

A key feature of this transaction was that the contract documents were carefully structured by Merrion and McCannFitzGerald in such a way as to enable the transaction withstand the de-regulation of the pharmacy industry which occurred between the time the contracts giving effect to the sale were signed and the conditions precedent set out in those contracts were met. The transaction was completed in June 2002.

Profile by: Pat Landy.

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