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Wednesday, 24th April 2024 |
| Deals of the year: As profiled by Ireland’s corporate finance advisers |
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Deals in excess of E1000m
Valentia
Acquirer: Valentia Telecommunications
Target: eircom
Acquirer advisor: Goldman Sachs
Target advisor: Goodbody Corporate Finance
Acquirer legal advisor:
A & L Goodbody
Target legal advisor:
Arthur Cox
Date of announcement:
06/01
Date of completion:
02/11/01
Consideration: E3 billion
Valentia’s E3 billion recommended offer for eircom went wholly unconditional on November 2 2001. This was the culmination of nine months of intensive negotiations, indications of interest, bids and counter bids which had commenced on 5 February 5 2001 when eIsland had first indicated an interest in acquiring eircom at a price of E1.10 per share.
The takeover of eircom was a groundbreaking transaction in Irish corporate history for a number of reasons:
It was the largest ever takeover; eircom’s lead adviser was a domestic adviser (Goodbody Corporate Finance) rather than a global investment bank; It was the most competitive takeover ever for an Irish public company given the number of interested parties (five different consortia) and the number of expressions of interest or bids submitted to the board of eircom during the offer period (18 in total); The role of the ESOT shareholder was key. The ESOT had different objectives than those of other shareholders which highlighted the complexity of having a large employee ownership of a publicly quoted company; and the profile of the interested parties (i.e. leveraged buy-out houses) required a slightly different process than would normally be the case in a public takeover situation; There was huge public interest given the large retail shareholder base this resulted in the media playing a key role in the transaction.
Complex transaction
Goodbody Corporate Finance lead managed a very complex process, dealing with multiple global advisers to parties with disparate agendas. The following number and types of parties were involved at various stages in the process:
• Five consortia of interest parties Valentia, eIsland, IIU, Blackstone and KKR;
• Four constituent sets of shareholders Comsource, ESOT, institutional and retail;
• 11 sets of potential equity providers;
• Nine sets of investment banking advisers;
• Six sets of potential debt providers; and
• Seven sets of lawyers.
Goodbody Corporate Finance co-ordinated negotiations with each of the consortia and their advisers to ensure maximum price tension and to ensure that each party received the same amount of appropriate due diligence information and access. Throughout the process, there was also a considerable amount of liaison and correspondence with the Irish Takeover Panel.
Offer price
eircom received 18 separate bids or expressions of interest between February and August 2001 ranging between E1.10 and E1.365 per share. On 5 February 2001 (the day prior to the announcement that eircom had received an approach from eIsland) the implied stock market value of eircom (excl. Eircell) was E0.92. The final offer price of E1.365 paid by Valentia represented a 48 per cent premium to this implied market value. The price was achieved against a backdrop of falling telco share prices. In the period from 6 February to the announcement of the Valentia offer, the share prices of eircom’s peers were falling considerably with BT down 45 per cent, France Telecom down 46 per cent, KPN down 63 per cent and Deutsche Telekom down 43 per cent. From an earnings multiple perspective the offer price of E1.365 represented a multiple of approximately seven times 2001 EBITDA. This compared very favorably with its fixed line peer group, which was trading at less than five times 2001 EBITDA.
Financing
The financing of the Valentia offer comprised equity of E675.6 million provided by Providence, Soros, ESOT Trustee, Goldman Sachs and Tony O’Reilly. Valentia was also financed by senior credit facilities of E2.4 billion arranged by Goldman Sachs, Deutsche Bank, Barclays Capital, Bank of Ireland and AIB. Goldman Sachs advised Valentia.
The sale of eircom to Valentia was hugely significant for the Irish capital markets. The appointment of Goodbody Corporate Finance as lead adviser by the board of eircom represented a strong vote of confidence and the successful execution of the transaction demonstrated that the investment banking and legal skills required to complete such a large and complex deal do exist in the local market.
Brian O’Kelly is managing director of Goodbody Corporate Finance.
NCB Corporate Finance (in conjunction with Goldman Sachs) advised Valentia Telecommunications Limited on the acquisition of Ireland’s largest telecommunication’s company, eircom plc. Valentia is a consortium comprising Sir Anthony O’Reilly, Providence Equity Partners, Soros Fund Management, Goldman Sachs and the eircom ESOP Trustee. Having initially faced competition from a rival bidder, the Denis O’Brien controlled eIsland, Valentia’s offer prevailed and was recommended by the board of eircom on 3 August 2001.
As well as advising at all stages of the bidding process, NCB Corporate Finance had the leading role in the design and implementation of the programme for communication of the Valentia offer to eircom’s substantial (480,000) retail shareholder base, most of whom were very disappointed with their investment.
Having received over 80 per cent acceptances, and with all conditions satisfied, the transaction completed on 2 November 2001. The E3.0 billion cost of the transaction was funded by equity provided by Valentia and senior debt provided mainly by Goldman Sachs, Deutsche Bank and Barclays.
Valentia has seen a great opportunity to enter the Irish market at an exciting time. Its intention is to run the business broadly as it was, but to grow and develop eircom by using the substantial experience the members of the consortium have gained from investing in and operating telecoms businesses globally.
Fergus McLoughlin is a director at NCB Corporate Finance.
Deals in excess of E100m
Irish Life & Permanent plc
Acquirer: Irish Life & Permanent plc
Target: TSB Bank
Divestor: Minister for Finance
Acquirer advisor: NCB Corporate Finance and Schroders.
Target advisor: PwC Corporate Finance
Acquirer legal advisor: A&L Goodbody
Target legal advisor: William Fry
Date of announcement: 5/12/00
Date of completion: 20/04/01
Consideration: E430 million
The sale of TSB Bank to Irish Life & Permanent plc (‘IL&P’) was completed on 20April 2001. The consideration amounted to E430m of which E366m was satisfied in cash with the balance of E64m being received by TSB’s Employee Share Ownership Plan in the form of IL&P shares.
The transaction created a new bank for the Irish market permanent tsb through the merger of TSB Bank with Irish Permanent, the retail bank of IL&P. Strategically, this represented a major step forward for IL&P towards their goal of becoming the No. 1 provider of personal financial services in Ireland. The enlarged group now has the full range of bank assurance products, comprising Irish Life’s life and pensions business, Irish Permanent’s mortgages and TSB’ s money transmission products, all of which customers can access through a wide variety of distribution channels.
For TSB, the transaction followed a detailed examination of the various avenues open to the Bank for its development. Merger with Irish Permanent was seen as the route, which best served the long-term interests of TSB’ s stakeholders - its customers, staff and the government.
Brian Evans is lead M&A partner at PricewaterhouseCoopers.
NCB Corporate Finance advised Irish Life & Permanent plc on the acquisition. NCB Corporate Finance’s role encompassed the following:
• Review of all information provided by the vendor
• Preparation of the initial bid
• Review of due diligence information
• Proposals to the Board of Irish Life & Permanent plc
• Review of the ESOP documentation
• Sale contract negotiation
• Advice on ultimate price
TSB gave Irish Life & Permanent plc the banking presence it needed to develop a proper bancassurance model and assisted in their strategy to become the No. 1 retail financial services provider in Ireland.
Fergus McLoughlin is a director at NCB Corporate Finance.
Kerry Group plc
Acquirer: Kerry Group plc
Target: Golden Vale plc,
Acquirer advisor: Davy Corporate Finance
Target advisor: IBI Corporate Finance, Close Brothers
Acquirer legal advisor: Kerry Group Legal Dept
Target legal advisor:
William Fry
Date of announcement:
25/06/01
Date of completion:
26/10/01
Consideration: E333.3m
Kerry Group’s acquisition of Golden Vale was a landmark deal in the Irish market last year being the largest M&A deal involving both an Irish acquirer and target.
The strategic rationale behind the deal was compelling. Substantial synergies are likely to accrue from the combination of the Kerry and Golden Vale consumer food businesses, particularly in the areas of convenience foods, prepared meals, dairy and low-fat spreads, cheese and fluid milk. In addition, the dairy and agri-business activities of the two groups also provide the opportunity for significant cost savings through streamlining the product mix and the restructuring of milk assembly and processing. The combination also results in the enlarged Kerry Group holding a strong position in several high growth segments of the European consumer foods markets.
IBI co-advised Golden Vale on this transaction. Under the terms of the offer, Golden Vale shareholders received their consideration in the form of cash in full or alternatively elected to take shares in the enlarged Kerry Group (together with a small cash payment). Shareholders who took consideration in the form of shares were given the opportunity to participate in the fortunes of the enlarged Kerry Group going forward, including the realisation of any synergies arising out of this deal. Finally, despite expectations in certain quarters that Kerry would win easily, the defense team ultimately secured a healthy price for Golden Vale shareholders.
Leo Casey is a manager at IBI Corporate Finance.
Davy was sole adviser to Kerry in what was Kerry’s first public takeover. Close Brothers and IBI advised GV.
Although Kerry had for many years been diversifying away from its traditional dairy area, the GV deal was highly sensible as it provided opportunities for significant cost savings through streamlining of the product mix, restructuring of milk assembly and synergies in feed milling and agri-trading. In any event consumer foods accounted for more than half of GV’s total sales.
The transaction was unusual in that the large number of farmer/milk suppliers that made up the share register. In the first instance a price was agreed with the board of GV but its was still regarded as a challenge to energise the a large ‘retail’ element of the GV share register to take the positive action of completing and returning an acceptance form. The target figure for acceptances was 80 per cent as this would allow the balance of the shares to be acquired compulsorily if necessary. In addition to dealing with the milk suppliers as shareholders, a lot of work was done by Kerry to ensure that they were suitably persuaded in their capacity as suppliers. To that extent an arrangement was made to allow them to integrate into the Kerry Co-op structure. Kerry has strength of depth in its management team and was able to deal with all the integration issues in a systemised fashion. The offer was at a 50 per cent premium to the prevailing share price prior to the announcement.
Ivan Murphy is a director at Davy Corporate Finance.
Rabobank
Acquirer: Rabobank
Target: ACC Bank
Divestor: Minister for Finance
Acquirer advisor: KPMG Corporate Finance
Target advisor: NCB Corporate Finance
Divestor advisor: Merrion Corporate Finance
Target legal advisor: Matheson Ormsby Prentice
Date of announcement:
05/12/01
Date of completion:
28/02/02
Consideration: •165m
KPMG Corporate Finance acted as financial advisers to Rabobank in its acquisition of the state owned ACC Bank for •165 million. This acquisition not only makes Rabobank, the first financial group from continental Europe to undertake retail activities in Ireland but it also effected the Irish Governments exit from retail banking in Ireland. Rabobank has been active with wholesale activities in Ireland since 1994 and is now one of the country’s larger banks. The acquisition of ACC Bank is part of Rabobank International’s country banking strategy. This strategy is aimed at acquiring banks that are primarily active in rural areas in developed markets with strong agricultural sectors. The acquisition was viewed as being very positive as not only does gives Rabobank access to retail activities in Ireland for the first time but ACC Bank will now have access to Rabobank’s product range and cost effective funding which will generate increased competition in the market which will be positive for the general banking public. The transaction was announced on 5 December 2001.
John Dillon is an associate director at KPMG Corporate Finance.
ACCBank ran the disposal process on behalf of the shareholder and NCB Corporate Finance was lead corporate advisor to ACCBank. NCB Corporate Finance’s role encompassed the following:
• Project management of the entire deal
• Preparing the bank for sale
• Preparation of the Information Memorandum
• Identifying and contacting bidders
• Co-ordinating the due diligence
• Liasing with the Minister for Finance
• Price negotiation
• Sale contract negotiation
• Negotiation of Employee Share Ownership Plan (‘ESOP’) for 14.9 per cent.
Rabobank’s ‘country banking’ strategy is focused on developing rural based banking in countries with a strong food and agricultural sector. ACC Bank’s retail network and focus on the agricultural and SME sectors represented a strong fit for Rabobank.
Fergus McLoughlin is a director at NCB Corporate Finance.
Merrion Corporate Finance acted as financial adviser to the Minister of Finance in relation to the sale of ACC Bank to Rabobank Nederland (‘Rabobank’). The sale of ACC Bank represented the last element of the Irish Government’s strategy to divest from the banking and financial services market. The acquisition of ACC Bank by Rabobank for a consideration of *165million was agreed on 5 Dec 2001 and finally completed on 1 March 2002.
The sale followed an announcement in January 2001 by the Minister of Finance that the Board of ACC had been mandated to prepare the bank for sale. Rabobank made an indicative offer for ACC in June 2001 and in August 2001 Merrion Corporate Finance was appointed to assist and advise the Minister of Finance in relation to any proposal for the acquisition of ACC.
In advising the Minister, Merrion’s brief was to analyse all information and documentation supplied by the Board of ACC and its advisers to the Minister and to provide such advice, valuation and recommendations to the Minister as required by him in relation to the sale of the Bank. As part of the engagement, Merrion prepared independent valuations of the Bank in connection with both the implementation of an ESOP and the actual sale of the Bank. In addition to provided advice regarding the structuring of the ESOP, Merrion also analysed the terms and conditions attaching to the sale when making its recommendation to the Minister.
Pat Landy is managing director of Merrion Corporate Finance.
Tosco Corporation
Acquirer: Tosco Corporation
Target: Irish National Petroleum Corporation
Target advisor: KPMG Corporate Finance
Date of completion: 16/07/01
Consideration: $100m
KPMG Corporate Finance advised Irish National Petroleum Corporation Limited (‘INPC’) in its strategic alliance process which culminated in the disposal of its business and principal commercial assets, chiefly the Whitegate Refinery (the Republic of Ireland’s only refinery) and the Whiddy Oil Terminal based in Bantry, to Tosco Corporation (‘Tosco’) for $100 million plus the value of the crude oil and products inventory. As a state-owned entity, INPC was requested by the Minister for Public Enterprise to seek out new commercial opportunities to underpin its core refining business. Tosco Corporation, which prior to itself being acquired by Phillips Petroleum Corporation, was the largest independent refiner and marketer of petroleum products in the United States, and this acquisition marked their first venture outside the US. The deal was completed on 16 July 2001.
John Dillon is an associate director at KPMG Corporate Finance.
Deals in excess of E50m
Murryhill Ltd
Acquirer: Murryhill Ltd 1
Target: PGA European Tour Courses plc
Acquirer advisor: IBI Corporate Finance
Target advisor: Lehman Brothers
Acquirer legal advisor: Herbert Smith
Target legal advisor: Berwin Leighton
Date of announcement: 17/08/01
Date of completion: 26/09/01
Consideration: E64.7 m
Note: 1A company wholly owned by Irish entrepreneur Denis O’Brien.
Denis O’Brien’s cash acquisition of PGA European Tour Courses plc, the London Stock Exchange listed developer, owner and manager of flagship golf facilities throughout Europe, marked the end of a very busy summer for the Irish entrepreneur coming as it did in the wake of his involvement in the closely contested Eircom takeover battle.
Quite apart from Mr O’Brien’s noted passion for golf, the acquisition had a strong strategic fit with Mr O’Brien’s existing European leisure interests including the five star Quinta do Lago golf and leisure complex in Portugal. IBI advised Murryhill on this transaction which culminated in a recommended mandatory offer for PGA following a long period of stake building in the company by Murryhill.
Leo Casey is a manager at IBI Corporate Finance.
Bank of Ireland
Acquirer: Bank of Ireland Group plc
Target: Willis National
Acquirer advisor: IBI Corporate Finance, Lazard
Target advisor: KPMG Corporate Finance
Acquirer legal advisor: Arthur Cox
Date of announcement: 03/07/01
Date of completion: 31/07/01
Consideration: E56.9m
Bank of Ireland’s purchase of Willis National, a leading provider of independent financial advice in the UK market, was the latest in a series of carefully selected UK acquisitions in profitable market segments designed to build on the Bank’s significant UK presence via its wholly owned subsidiary Bristol & West plc. Specifically, the acquisition will diversify Bristol & West’s advisory capability as more than half of Willis National’s income is derived from pension and corporate business, a market in which Bristol & West was previously under-represented. The transaction should also deliver significant synergies as Bristol & West intends to merge Willis National with its MoneyeXtra subsidiary, which it acquired in 2000 to create a single advisory-based organisation with enhanced sales capability integrating internet, call centre and face-to-face advisory services.
Leo Casey is a manager at IBI Corporate Finance.
Deals in excess of E10m
National Toll Roads
Acquirer: National Toll Roads
Target: Celtic Utilities (76.9%)
Acquirer advisor: PwC Corporate Finance
Target advisor: Merrion Corporate Finance
Acquirer legal advisor: Arthur Cox
Target legal advisor:
William Fry
Date of announcement:
13/07/01
Date of completion: 31/08/01
Consideration: •47.4 million
In August 2001, National Toll Roads plc completed the acquisition of a 76.9 per cent stake in Celtic Utilities Limited, one of Ireland’s leading players in the environmental infrastructure sector. The transaction implied a value of over •60m for Celtic Utilities. The consideration of •47.4m was satisfied by a mixture of convertible loan notes, NTR shares and cash.
The deal continues NTR’s transformation from being a road infrastructure and toll operator into a broadly based developer and operator of infrastructure in Ireland. NTR now has leading positions in the roads, waste management, energy and water/wastewater sectors in Ireland.
Celtic Utilities has well-established positions in the environmental sector. It is a joint venture partner with NTR in Celtic Waste. Celtic Waste offers integrated waste management services including collection, sorting, recycling and disposal. Celtic Utilities also owns 50 per cent of Celtic Anglian Water, a joint venture with AWG plc, which operates and develops water and wastewater infrastructure. The company has emerged as a leading player in the provision of water/wastewater infrastructure under the Government’s Capital Investment Programme for water and sewerage services which aims to spend •3.8 billion over the next five years upgrading facilities in order to comply with European legislation.
Brian Evans is lead M&A partner at PricewaterhouseCoopers.
Merrion Corporate Finance acted as financial adviser to the shareholders of Celtic Utilities in the sale of a controlling interest to National Toll Roads plc, (‘NTR’) in July 2001.
Celtic Utilities founded in 1999 is one of the fastest growing companies in the environmental / waste management area in Ireland. NTR acquired the 76.9% of Celtic Utilities controlled by entrepreneur, John Gallagher, while ICC Equity Partners retained the balance of the equity. The consideration comprised of 943,767 NTR ordinary shares, a convertible /redeemable loan note with a par value of *38.4million and *1.1million in cash, implying a total value of over *60million for Celtic Utilities.
Merrion was engaged by Celtic Utilities to provide advice and assistance in relation to a number of offers made for some or all of the issued share capital of the company. We performed a commercial and financial analysis of each of the offers for Celtic Utilities and made recommendations to the Board and shareholders of the company. We also prepared an independent valuation of the offer in addition to an analysis regarding the optimal value and structure for all of the shareholders and provided assistance in negotiating the final terms of the offer.
Pat Landy is managing director of Merrion Corporate Finance.
Standard Brands Limited
Acquirer: Standard Brands Limited
Target: European firelighter business
Divestor: Reckitt Benckiser plc
Divestor advisor: KPMG Corporate Finance
Date of announcement:
3/04/01
Consideration: approx. •47m
KPMG Corporate Finance acted as financial advisers to Reckitt Benckiser plc, the worlds number one household cleaning company, in the disposal of their European firelighter business to Standard Brands, a UK venture capital company. The firelighter business, whose brands included the household brand ‘ZIP’ was based in Ireland but also had sales in the UK, France, Belgium and Germany. The proceeds of the disposal amounted to ?stg29m (approx. •47m). The disposal was announced on 3 April 2001.
John Dillon is an associate director at KPMG Corporate Finance.
Miza/Goldshield Consortium
Acquirer: Miza/Goldshield Consortium
Target: The Antigen Group
Acquirer advisor: In house team
Target advisor: BDO Simpson Xavier
Acquirer legal advisor: Matheson Ormsby Prentice
Target legal advisor:
Arthur Cox
Date of announcement: 11/01
Date of completion: 11/01
Consideration: IR?30m
The Antigen Group, located in Roscrea, is a niche manufacturer and marketer of branded and non-branded generic pharmaceuticals products. It employs approximately 328 persons with a turnover in excess of IR?28m. From the outset a number of large international players in the pharmaceuticals sector expressed strong interest in Antigen, recognising its unique market position and the Antigen brand.
Market forces indicated that manufacturing was declining as a core competency for certain pharmaceutical companies and that outsourcing penetration was increasing as pharmaceutical companies continuously seek to reduce fixed asset investment. In an effort to align the strengths of the business with developing market forces, the potential of splitting the business by means of a collaboration between an experienced pharmaceutical marketing and distribution business and a quality contracting manufacturing operator with experience in dealing with multi-national and generic pharmaceutical companies was identified as the best way forward.
Ultimately the acquiring party was a consortium consisting of Miza Pharmaceuticals Inc, a privately owned Canadian contracting manufacturer and Goldshield Plc, a quoted UK Company with a market capitalisation in excess of Stg320m involved in marketing and distribution of pharmaceuticals and healthcare products. Miza is in effect managing the manufacturing end of the business while Goldshield sells and distributes the Antigen products. The deal value was IR?30m and was concluded in November 2001.
Louis O’Neill, BDO Simpson Xavier.
Ulster Television plc
Acquirer: Ulster Television plc (UTV)
Target: County Media Limited (60 per cent)
Acquirer advisor: Goodbody Corporate Finance
Target advisor: Communications Equity Associates International
Date of announcement: 17/04/01
Date of completion: 17/04/01
April 2001
Consideration: IR?28.9m
In April 2001, UTV completed the acquisition of 60 per cent of County Media, a radio broadcasting business based in Cork, Ireland, for a consideration of circa IR?17.3m.
County Media operates three independent local radio stations (96FM in Cork City, 103FM in North Cork and 103FM in West Cork) and has leadership positions in the Cork area. In addition to the radio stations, County Media has its own advertising sales operations and publishes a free sheet newspaper, Inside Cork.
The transaction was effected through a holding company, Fairtell Limited, which was 60 per cent owned by UTV and 40 per cent by the shareholders in County Media. Fairtell acquired 100 per cent of County Media for a consideration of circa IR?28.9m. At the time of the acquisition, County Media had a net debt of circa IR?1.95m. Subject to the consent of the Broadcasting Commission of Ireland it is UTV’s intention to acquire the remaining 40 per cent of Fairtell from the vendors.
The acquisition represented a key step in the implementation of UTV’s stated strategy to expand its media interests on an all Ireland basis and further strengthens its position as an important indigenous market participant with a commitment to the development of the Irish broadcasting market
Goodbody Corporate Finance advised UTV and Communications Equity Associates International advised County Media in relation to the transaction.
Cara Group MBO
Acquirer: Management backed by Hibernia Capital Partners
Target: Cara Group Ireland
& UK
Acquirer advisor: CFM Capital Limited
Target advisor: Regent Associates
Acquirer legal advisor:
A & L Goodbody & Matheson Ormsby Prentice
Target legal advisor: William Fry Solicitors
Date of announcement:
28/02/01
Date of completion:
28/02/01
Consideration: E33m
Bull, the French IT solutions provider, sold Cara Group, its Irish IT solutions and payroll services subsidiary, in a management buy-out transaction valued at E33m in cash and debt. The MBO team was advised by CFM Capital and was backed by Hibernian Capital Partners, a subsidiary of Reihill Venture Capital Group, the Irish venture capital firm and Allied Irish Bank.
Mark McComish is a manager at CFM Capital.
Acotel Group Spa
Acquirer: Acotel Group Spa
Target: Jinny Software
Target advisor: PwC Corporate Finance
Acquirer legal advisor: Chiomenti Studio Legale
Target legal advisor: Landwell
Date of announcement: 5/02/01
Date of completion: 9/04/01
Consideration: •15.5 million
Jinny Software was established in Dublin in June 1999 by Roy Zakka and his wife, Jacqueline. The Company supplies platforms to mobile operators. The platforms deliver multimedia messaging and internet applications to mobile devices.
On 5 February 2001, Roy Zakka and Acotel Group, a company listed on the Italian Nuovo Mercato, signed a contract for the acquisition of Jinny Software by Acotel in a deal worth •15.5m. The transaction involved a •3.2m capital injection into Jinny Software and the payment of •2.2m in cash and the issue of •10m guaranteed debentures to the vendors. In addition to the acquisition, Acotel Group placed an order on 5 February with Jinny Software for the immediate delivery of an SMSC (Share Messaging Service Centre) for an additional •1.1m.
The acquisition, which was completed on 9 April 2001, was mutually beneficial to both companies, allowing them to expand their respective customer bases. Jinny had a strong, existing client base in Europe and the Middle East whereas Acotel had an extensive presence in its native Italy, the Mediterranean countries and in Latin America. Jinny’s customers include Vodafone (Eircell) and the Middle Eastern operators Batelco in Bahrain, Mobile Lebanon and FastLink, Jordan.
Brian Evans is lead M&A partner at PricewaterhouseCoopers.
Full Circle Investments
Acquirer: Full Circle Investments
Target: Capital Bars
Acquirer advisor: Davy Corporate Finance
Divestor advisor: ING Barings
Acquirer legal advisor: Hobson Audley and Reddy Charlton & McKnight
Target legal advisor: Andersen Legal
Date of announcement: 12/01
Date of completion: 02/02
Consideration: •12m approx
This was a relatively small transaction but interesting as it was effectively a take-private by the O’Dwyer cousins of a company which they owned a large portion of the shares having sold many of their properties in exchange for shares in 1999. The Offer was at a 56 per cent premium to the share price prevailing prior to the announcement. The timing of the offer was crucial, coming relatively quickly after the September 11 atrocities and at a time when most commentators felt that the Irish economy was facing rougher waters. The transaction was complicated by the fact that an individual investor took a view that the company was worth more than reflected in the offer despite the recommendation by the Independent Directors and ING Barings and proceeded to build up a 10 per cent stake. Although this was sufficient to prevent the compulsory purchase of the outstanding shares, thankfully it did not prevent the deal from completing.
Ivan Murphy is a director of Davy Corporate Finance.
Monset Ltd
Acquirer: Monset Ltd
Target: James Crean plc
Acquirer advisor: Davy Corporate Finance and Ernst & Young
Divestor advisor: BDO Simpson Xavier
Acquirer legal advisor: Eugene F. Collins
Target legal advisor: William Fry
Date of announcement:
07/01
Date of completion: 09/01
Consideration: •12m approx
James Crean was a long time member of the Irish Stock Exchange. At one time one of the largest companies on the market, it had suffered in recent years from a combination of poor trading performance and the markets indifference to small-quoted companies. In March the company issued a trading statement which indicated that it would be in breach of its banking covenants and that, having evaluated a number of different options the directors had asked Ray McLoughlin to consider a privatisation proposal. Thus, the offer by Monset was effectively the take-private of the company by Ray McLoughlin, albeit at a price far below that at which the shares had traded historically. This in itself became an issue during the course of the offer as it became clear that certain shareholders that had bought the stock at much higher levels were reluctant to accept any offer that was put on the table. The offer was at a 50 per cent premium to the price at which the shares in the company were suspended in April 2001
Ivan Murphy is a director at Davy Corporate Finance.
New Era Packaging MBO
Acquirer: Management
Target: New Era Packaging Limited (Subsidiary of IWP plc)
Acquirer advisor: CFM Capital Limited
Acquirer legal advisor: O’Donnell Sweeney Solicitors
Target legal advisor: Gerard Scallon O’Brien
Date of announcement: 01/10/01
Date of completion: 30/09/01
Consideration: •10.2m
IWP International Plc, in line with its stated objective of focussing on its core activities in the household products and personal care sectors, disposed their subsidiary New Era Packaging Ltd for a consideration of IR?8.0 million (•10.2 million). The company was sold to the existing management team of New Era. IR?7.0m (•8.9m) of the consideration was satisfied in the form of cash with an additional IR?1.0 million (•1.27 million) in the form of a 5 year convertible loan note.
New Era is based in Drogheda and is a leading supplier of labels and related products in both the domestic and export market. In the year ended 31 March 2001 it recorded a profit before tax of IR?1.2m (•1.5m) on turnover of IR?10.8 million (•13.7 million). The MBO team was advised by CFM Capital and was backed by Allied Irish Bank. |
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| Article appeared in the April 2002 issue.
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