News - Midlands
COVER STORY: Dealmakers of the Year
Right on time
A can-do northern spirit helped Bank of Scotland's Trevor Foster keep
busy in a deal drought. Jim Pendrill caught up with our Dealmaker of the Year
It has been quite a summer for Trevor Foster. For starters, the day we meet in his boardroom overlooking Birmingham's Colmore Square he not surprisingly looks relaxed, albeit with a slightly fading tan, after having just returned from his first ever three week summer break.
The treat for the father-of-two and his family is due in large part to his recent decision to join many contemporaries and become a Spanish property owner. "I cannot believe I haven't done it sooner," comes the familiar refrain.
The extended break was one he needed too, as much for personal as working reasons. The sudden death earlier this summer of his long-time friend and former colleague at Barclays, David Burrows, affected Foster as much as anyone in the tightly-knit Midlands corporate finance community. It really was time to be with the family. "It has deeply affected everyone in the community," adds Foster.
But on the working front no one could argue Foster didn't deserve a good break either. For while many have sat on their hands during the dealmaking drought of the last two years, Foster - who only just lost out to Phil Burns as our dealmaker of the year 12 months ago - has been as busy as ever.
In part one could argue that this has been an inevitable reflection of the market. After all, in these times of depressed profits and poor rates of returns venture capitalists have naturally been rather quiet and debt-only deals have seemed far more attractive to all concerned.
But that tells only part of the story. As Foster proudly opens a leather bound folder containing his year-end figures, he proceeds to tell me that of the 30 transactions his structured finance team has pulled off in the last 12 months only "seven or eight" have been debt-only.
Far more revealing is the statistic that 28 of those transactions have actually created new customers for the bank, proof that, when it comes to doing deals, banks in general are now focusing far more heavily on deal origination.
"We have lent upwards of £3500m extra new money this year," adds Foster. "Sitting here today I can say that we have exceeded our own expectations."
Now there aren't many who can go around saying that at the moment. So what is the rest of the story? Just why has Foster had such a good run?
He takes a long deep breath before answering the question, as if slightly unsure himself for the real reason. "I suppose it comes down to the fact that we have created an environment based on a positive can-do spirit.
That can really be tested through more difficult times but this bank has proved before that in tough times it is supportive of businesses when it really needs to be.
"We have also made a specific effort to continue to plan through such a difficult cycle. This bank did some of its best deals in the early 90s when most others were running from the hills."
The can-do spirit should come as little surprise if you look at Foster's upbringing. Brought up in the northern town of Wigan - incidentally he could have played for Wigan Athletic as a teenager and subsequently had trials for Liverpool when 17 ("I wasn't good enough") - his parents' influence is obvious. "My dad was in the building trade and my mum was a sower. They just got on with it."
I suggest another reason for Foster's success is that does not fit the staid image of a stereotypical banker. Instead he is outgoing, fun and a consummate networker. "Sometimes you do need to bring a certain personality to your skill set. You have to get around the marketplace, really get yourself known. I do possess the more sobering attributes of banking, it's just that they are well hidden."
But perhaps the biggest key to Foster's success is simply the team he has built around him since his four years at the helm of structured finance.
The strength in depth of his team is evidenced by the fact that two of his directors, Ian Aston and David Macdonald, were also shortlisted for our individual banking award this year, while associate director Andy Oates took our Young Dealmaker title. "You cannot do it all on your own. When I came here I was looking to build a business. What I have been able to do since is create a culture and spirit that means we always try and find ways of doing things. Anyone can find a way not to do things," adds Foster.
Indeed, Foster is gradually trying to reduce his day-to-day involvement with deals. "I tend to get involved either upfront or towards the end of a deal if issues arise that need my input. The team will only grow if it is given increased responsibility that keeps them stimulated."
That said Foster accepts that he still loves to get involved at the sharp end and it is difficult to completely let go. Once a dealmaker always a dealmaker as they say.
Earlier this summer he helped orchestrate the management buyout of Sutton Coldfield-based discount books retailer Remainders.
"This was a business I had known for a number of years through personal contacts with directors and as a bank we had been following it for a couple of years or more. At the time we first looked there was no transaction to be had but in time it became more viable. We volunteered our services and put a package together to help advisers sell the business. From there on in Clearwater Corporate Finance was instrumental in bringing on board the chairman we needed to get the deal away."
All of which backs up Foster's view that in today's tough dealmaking climate deal origination is just as important for him as it is for corporate financiers.
"Frankly deal origination is the key to any organisation being successful. If you can differentiate yourself there can also be a snowball effect. People start saying let's go to BOS to do a deal. You can never underestimate momentum."
At this juncture Foster is also keen to stress the importance of the bank's relationship banking team in the Midlands headed by John Kelly. "They work hand in glove with the deal team. Unless we had the support of the relationship guys we would not have achieved half of what we were able to in the past year."
The Remainders deal also showed that private equity deals are still around if you can find them. "It is probably true that in the present climate the VC does not see much of an opportunity to gain the return it is looking for and maybe banks can get an enhanced return," mulls Foster. "At the end of the day we are interested in steady, profitable, cash-generative businesses with a proven track record. We can also provide exits."
In common with every other financier around, Foster and his team don't limit their ambitions to the Midlands. Although they do more than their fair share of pure Midlands deals (half of last year's transactions) they have started doing more deals further afield.
They have begun tapping into HBOS's still young continental offices, while another area of growth is Scandinavia on the back of growing links between HBOS and Icelandic bank Kaupthing.
And competitors beware, Foster believes there is plenty more to go at too.
He wants to be getting through the door earlier. "We want to be talking more to businesses that don't know yet that they will be selling. We need to be speaking more with CEOs and MDs. There is always a cake and our job is to get to see some more of it."
In a tough market to call Foster has been surprised by recent trends.
"My tip for the first half of 2003 was that a number of take privates would conclude. My biggest surprise is that we have not got so many away as I thought we would," he adds.
Foster is reluctant to be drawn on what might happen from here on in. "I'm not sure if many take privates are ripe for this year", but adding with a wry smile, "they will always be there for another day".
Your most noteworthy deals of the year?
It is always difficult to single out deals as each is noteworthy for different reasons and the larger transactions tend to attract the attention. However, I have gained particular satisfaction from seeing the Steelite, Admiral, First Assist and Remainders transactions reach completion. These were all new customers to the bank.
Biggest factors contributing to business success? Firm decisive and quick action in response to changing market conditions; keeping extremely close to customers and genuinely trying to work in partnership with them - too many people TALK about partnerships, few really mean it; getting the business to work as one team - directors and workforce alike.
Biggest issues facing Midlands directors? There has been a distinct lack of confidence and an increased level of uncertainty apparent for more than the last 12 months. Companies have been very concerned about the credit worthiness of their customers and have found it difficult to plan with confidence. The best solutions have invariably involved all parties working together to come up with a mutually agreed plan - not rocket science, is it?
What did you think of the Higgs report? The spirit of what it was trying to achieve was fine. Maybe it was a bit rushed as some of the proposals should have been thought through a bit more. However, it certainly created a healthy debate, which can only be a good thing.
Types of deals in the next 12 months?
There will be more releveragings, refinancings and increased subsidiary sell-offs.
FTSE level at the end of the year?
4400
For the fuller picture,
subscribe to Insider
every month.
Close
A can-do northern spirit helped Bank of Scotland's Trevor Foster keep
busy in a deal drought. Jim Pendrill caught up with our Dealmaker of the Year
It has been quite a summer for Trevor Foster. For starters, the day we meet in his boardroom overlooking Birmingham's Colmore Square he not surprisingly looks relaxed, albeit with a slightly fading tan, after having just returned from his first ever three week summer break.
The treat for the father-of-two and his family is due in large part to his recent decision to join many contemporaries and become a Spanish property owner. "I cannot believe I haven't done it sooner," comes the familiar refrain.
The extended break was one he needed too, as much for personal as working reasons. The sudden death earlier this summer of his long-time friend and former colleague at Barclays, David Burrows, affected Foster as much as anyone in the tightly-knit Midlands corporate finance community. It really was time to be with the family. "It has deeply affected everyone in the community," adds Foster.
But on the working front no one could argue Foster didn't deserve a good break either. For while many have sat on their hands during the dealmaking drought of the last two years, Foster - who only just lost out to Phil Burns as our dealmaker of the year 12 months ago - has been as busy as ever.
In part one could argue that this has been an inevitable reflection of the market. After all, in these times of depressed profits and poor rates of returns venture capitalists have naturally been rather quiet and debt-only deals have seemed far more attractive to all concerned.
But that tells only part of the story. As Foster proudly opens a leather bound folder containing his year-end figures, he proceeds to tell me that of the 30 transactions his structured finance team has pulled off in the last 12 months only "seven or eight" have been debt-only.
Far more revealing is the statistic that 28 of those transactions have actually created new customers for the bank, proof that, when it comes to doing deals, banks in general are now focusing far more heavily on deal origination.
"We have lent upwards of £3500m extra new money this year," adds Foster. "Sitting here today I can say that we have exceeded our own expectations."
Now there aren't many who can go around saying that at the moment. So what is the rest of the story? Just why has Foster had such a good run?
He takes a long deep breath before answering the question, as if slightly unsure himself for the real reason. "I suppose it comes down to the fact that we have created an environment based on a positive can-do spirit.
That can really be tested through more difficult times but this bank has proved before that in tough times it is supportive of businesses when it really needs to be.
"We have also made a specific effort to continue to plan through such a difficult cycle. This bank did some of its best deals in the early 90s when most others were running from the hills."
The can-do spirit should come as little surprise if you look at Foster's upbringing. Brought up in the northern town of Wigan - incidentally he could have played for Wigan Athletic as a teenager and subsequently had trials for Liverpool when 17 ("I wasn't good enough") - his parents' influence is obvious. "My dad was in the building trade and my mum was a sower. They just got on with it."
I suggest another reason for Foster's success is that does not fit the staid image of a stereotypical banker. Instead he is outgoing, fun and a consummate networker. "Sometimes you do need to bring a certain personality to your skill set. You have to get around the marketplace, really get yourself known. I do possess the more sobering attributes of banking, it's just that they are well hidden."
But perhaps the biggest key to Foster's success is simply the team he has built around him since his four years at the helm of structured finance.
The strength in depth of his team is evidenced by the fact that two of his directors, Ian Aston and David Macdonald, were also shortlisted for our individual banking award this year, while associate director Andy Oates took our Young Dealmaker title. "You cannot do it all on your own. When I came here I was looking to build a business. What I have been able to do since is create a culture and spirit that means we always try and find ways of doing things. Anyone can find a way not to do things," adds Foster.
Indeed, Foster is gradually trying to reduce his day-to-day involvement with deals. "I tend to get involved either upfront or towards the end of a deal if issues arise that need my input. The team will only grow if it is given increased responsibility that keeps them stimulated."
That said Foster accepts that he still loves to get involved at the sharp end and it is difficult to completely let go. Once a dealmaker always a dealmaker as they say.
Earlier this summer he helped orchestrate the management buyout of Sutton Coldfield-based discount books retailer Remainders.
"This was a business I had known for a number of years through personal contacts with directors and as a bank we had been following it for a couple of years or more. At the time we first looked there was no transaction to be had but in time it became more viable. We volunteered our services and put a package together to help advisers sell the business. From there on in Clearwater Corporate Finance was instrumental in bringing on board the chairman we needed to get the deal away."
All of which backs up Foster's view that in today's tough dealmaking climate deal origination is just as important for him as it is for corporate financiers.
"Frankly deal origination is the key to any organisation being successful. If you can differentiate yourself there can also be a snowball effect. People start saying let's go to BOS to do a deal. You can never underestimate momentum."
At this juncture Foster is also keen to stress the importance of the bank's relationship banking team in the Midlands headed by John Kelly. "They work hand in glove with the deal team. Unless we had the support of the relationship guys we would not have achieved half of what we were able to in the past year."
The Remainders deal also showed that private equity deals are still around if you can find them. "It is probably true that in the present climate the VC does not see much of an opportunity to gain the return it is looking for and maybe banks can get an enhanced return," mulls Foster. "At the end of the day we are interested in steady, profitable, cash-generative businesses with a proven track record. We can also provide exits."
In common with every other financier around, Foster and his team don't limit their ambitions to the Midlands. Although they do more than their fair share of pure Midlands deals (half of last year's transactions) they have started doing more deals further afield.
They have begun tapping into HBOS's still young continental offices, while another area of growth is Scandinavia on the back of growing links between HBOS and Icelandic bank Kaupthing.
And competitors beware, Foster believes there is plenty more to go at too.
He wants to be getting through the door earlier. "We want to be talking more to businesses that don't know yet that they will be selling. We need to be speaking more with CEOs and MDs. There is always a cake and our job is to get to see some more of it."
In a tough market to call Foster has been surprised by recent trends.
"My tip for the first half of 2003 was that a number of take privates would conclude. My biggest surprise is that we have not got so many away as I thought we would," he adds.
Foster is reluctant to be drawn on what might happen from here on in. "I'm not sure if many take privates are ripe for this year", but adding with a wry smile, "they will always be there for another day".
Your most noteworthy deals of the year?
It is always difficult to single out deals as each is noteworthy for different reasons and the larger transactions tend to attract the attention. However, I have gained particular satisfaction from seeing the Steelite, Admiral, First Assist and Remainders transactions reach completion. These were all new customers to the bank.
Biggest factors contributing to business success? Firm decisive and quick action in response to changing market conditions; keeping extremely close to customers and genuinely trying to work in partnership with them - too many people TALK about partnerships, few really mean it; getting the business to work as one team - directors and workforce alike.
Biggest issues facing Midlands directors? There has been a distinct lack of confidence and an increased level of uncertainty apparent for more than the last 12 months. Companies have been very concerned about the credit worthiness of their customers and have found it difficult to plan with confidence. The best solutions have invariably involved all parties working together to come up with a mutually agreed plan - not rocket science, is it?
What did you think of the Higgs report? The spirit of what it was trying to achieve was fine. Maybe it was a bit rushed as some of the proposals should have been thought through a bit more. However, it certainly created a healthy debate, which can only be a good thing.
Types of deals in the next 12 months?
There will be more releveragings, refinancings and increased subsidiary sell-offs.
FTSE level at the end of the year?
4400
For the fuller picture,
subscribe to Insider
every month.
Close