News - Midlands
Beer, fruit, bricks, mobile phones, jeans, footie - they've all been firmly on the agenda when it comes to completions in recent months.
Indeed as our table on page 30 shows, the big money has been in the telecoms and drinks sector. The final £31.4bn disposal of the Stoke-based Caudwell telecoms empire to private equity tops our list in terms of the biggest value deal, while a trio of deals in the ever-busy pub sector were not far behind.
For instance in July Whitbread agreed the sale of 239 pub restaurants to Birmingham-based Mitchells & Butler in a £3497m deal which Mitchells chief executive Tim Clarke described as "exceptional value" compared with greenfield site development.
Meanwhile rival Brummie drinks empire Enterprise Inns agreed to sell 769 pubs to Admiral Taverns in a £3318m deal, while last month another of the region's big hitters, Punch Taverns, acquired Broomco, the holding company of the Mill House Group, a private pub and restaurant operator. Punch bought the portfolio from the Bank of Scotland and the management team for £3164m.
Even a Dudley bricks business got in on the dealmaking feast, albeit one of the region's most established building products groups. In August Baggeridge Brick received a dream £389m offer from Weinerberger, the Austrian brick and roof tile manufacturer. Weinerberger is number three in the European market for facing bricks and particularly wanted to add clay roof tiles to its product range.
Wolfgang Reithofer, chief executive, told investors that the deal would also help his business deal more effectively with issues such as high energy costs.
And then, lest we forget amid the miracles being performed on the pitch by Martin O'Neill, there was the sale of Aston Villa to Randy Lerner for £362.6m - a deal which many rainmakers probably felt they would never live to see.
But behind the headline grabbing, big-ticket deals, there were plenty of extraordinary stories lurking just beneath this quarter.
Take the £318.5m buyout of Derby-based fashion brand Golddigga by London venture capitalist (VC) Octopus Investments. Not a bad pay day for founder - and one-time pop manager - Aaron Thalmann who a decade ago began creating and selling T-shirts through his Designdock business.
In 1999 he founded Golddigga and has not looked back since, now selling to around 350 outlets in the UK and increasingly across mainland Europe.
If you have not got a teenage daughter you may not have haven't happened upon the brand just yet, but girls across the country buy Golddigga hoodies, T-shirts and urban streetwear in big numbers. Eighty per cent of sales are in the UK and turnover has more than doubled to £310m in two years. The business has also diversified its offering, moving into footwear, stationery and jewellery.
Roy Farmer, corporate finance partner at accountant Cooper Parry in Derby, had been working on the deal since early last year during which time he says Golddigga crucially went from being "a name into a brand".
"The business was growing so rapidly that Aaron wanted to strengthen the management team and cash in a bit at the same time. We looked at a trade sale but also started looking at private equity. We started to properly market the business just under a year ago but the missing piece of the jigsaw was finding a new chief executive."
The buy-in candidate was found in the shape of Daniel Morris who joined the business in June this year. Morris has 20 years in the trade, having worked for names like Courtaulds, Lee Cooper, World Design & Trade (WDT) and Mexx. After leaving WDT last year he had been looking for buy-in opportunities.
He says the focus now will be on growing both domestic and overseas sales backed up by a "significantly increased investment in marketing and sales support".
Thalmann, who with his family has retained a majority 80 per cent stake, is now creative director. Debt for the deal came courtesy of Yorkshire Bank.
It was not the only unheralded deal that Farmer and his team at Cooper Parry worked on this quarter.
The world of oil rig technology might seem a world away from the Midlands, but one entrepreneur in the field from deepest Derbyshire, Tony Dickenson, has just topped up his pension quite nicely.
He and fellow director of Salem Automation Derek Gennard were looking to retire and landed a sale to the Norweigan Hitec Industries group.
Farmer adds: "The pair had built a unique product over the last few years whereby they devised technology which effectively helps control and monitor the number of employees on oil rigs. A sale to a Norweigan business is the perfect result, given the country's dominance in this field, although there were a lot of potential buyers."
Legal advice to the vendors came from Eversheds in Nottingham.
Food was also on the agenda for dealmakers in the quarter, both the production and distribution of it. Yet again it was those Icelandic raiders at Baugur who got in on the act, with help from the Birmingham financial community which has supported the firm on a string of deals over the past few years.
This time it related to Woodward Foodservice and its acquisition of DBC Foodservice to create a £3500m turnover foodservice group and consolidate its position as the UK's third largest supplier to the catering industry.
Woodward, which has distribution centres in Darlaston and Digbeth, supplies a range of products including fresh fish, fresh meat, frozen, chilled and ambient food to restaurants, pubs, hotels and schools across Britain. The company has an annual turnover of £3210m and employs 1,100 people across 15 distribution sites.
The acquisition comes a year after a management buyout (MBO) led by chief executive Ed Hyslop. Hyslop led supermarket chain Iceland's original acquisition of Woodward back in 1997 and has since expanded the company into a national operator.
The latest deal was backed by existing investors Baugur and Talden. It was put together by the Birmingham offices of Lloyds TSB Commercial Finance, Catalyst Corporate Finance and law firm Browne Jacobson. Funding also came from Landsbanki Commercial Finance.
DBC Foodservice, a wholly-owned subsidiary of the Danish Crown Group, has a network of 13 distribution warehouses throughout the UK, employs 800 people and has an annual turnover of £3200m.
Hyslop says: "DBC is a successful operator and a great fit for us.
Its distribution centres will strengthen our network and give us an excellent customer base across a number of strategically important sectors."
Simon Woodcock from Lloyds TSB Commercial Finance adds: "This is a highly strategic move for Woodward giving it the critical mass it requires to expand and take advantage within what is now a £39bn market."
Staying with the food theme, another highlight of the quarter was the secondary buyout of fruit importer and distributor Empire World Trade (EWT).
Exiting venture capitalist 3i backed the primary buyout back in 1997. The latest deal was backed by Isis Equity Partners and Royal Bank of Scotland with Clearwater Corporate Finance advising on the transaction. Legal advice was provided by Browne Jacobson, HBJ Gateley Wareing, Geldards, DLA and Addleshaws.
With an £380m plus turnover EWT, based in Spalding, is a key supplier to big retailers including Tesco, Marks & Spencer and Morrisons. The company imports just under 15 per cent of the UK apple market, and last year even established its own English orchard.
ISIS Equity Partners invested £35.2m as part of the transaction. Director Richard Bucknell says: "EWT operates in a demanding market but stands out as best in class from its peers."
ISIS and Clearwater also advised the shareholders of Wiggle, the online sports clothing and equipment retailer, on an £311.5m cash-out deal. Wiggle's founders will retain a controlling stake and continue to manage the business.
Founded in 1999, Wiggle began life as a site for cycle enthusiasts but in the last couple of years has spread a winning formula to other sports categories including running, swimming, hiking and snow boarding. In the year to January 2006 it achieved sales of £312m. Clearwater first met co-founders Harvey Jones and Mitch Dall in July 2005 after identifying Wiggle as a target.
Yet another Clearwater advised deal in the quarter was the £3100m secondary buyout of Coventry vinyl flooring business Amtico. With a turnover of more than £380m, the company employs over 700 people and has plants both in the UK and the US.
The deal saw management take a significant equity stake alongside ABN Amro Capital and Electra in a classic twin-track sale process which could either have led to a trade buy or disposal to private equity.
Clearwater partner Jon Hustler said: "Amtico is a high quality business with a well respected brand. Its fortunes and prospects have been transformed over recent times following the appointment of Jonathan Duck as chief executive and James Frost as finance director. There is now a clear and focused strategy for growth which will be delivered by a strong management team."
Tom Cawley from Royal Bank of Scotland in Birmingham, which provided senior debt for the deal, singled out the transaction as a particular highlight of the quarter and symptomatic of the market in general. "Amtico is a good example of the way the market is continuing to be driven by a twin track approach and by secondary and tertiary deals. A lot of people say they are busy but the likelihood is that a lot of them are working on the same deals.
If you started playing bingo with work in progress you might find everyone circling the same numbers."
However it wasn't just all about buyouts this quarter.
Flotations also made a return of sorts, most notably with the listing
of Nottingham-based Experian (see cover story page 18). Another eagerly awaited listing for the region will also be that
of Dunelm, the soft furnishings retailer which began life when Jean Adderley and her husband Bill started selling curtains on a Leicester market in 1979.
Dunelm has grown into one of the UK's largest homeware retailers with 82 branded stores mainly on out-of-town sites in the Midlands and North West. Mrs Adderley, who retired five years ago, will sell her stake of about 30 per cent in a listing at the end of this month which should value the company upwards of £3350m.
Bill Adderley is retaining his 50 per cent stake. Their son Will, who took over as chief executive in 1996, has ambitious plans for the business, aiming to raise the number of stores to 150.
And finally, many rainmakers pointed to a rise in international deals in the quarter. Stephen Kitts, head of corporate at law firm Eversheds, remarked: "Cross-border deals have definitely been on the rise as businesses in the region look to spread their wings beyond the UK and foreign firms eye investment opportunities in the Midlands."
Apples and pears
Beer, fruit, bricks, mobile phones, jeans, footie - they've all been firmly on the agenda when it comes to completions in recent months.
Indeed as our table on page 30 shows, the big money has been in the telecoms and drinks sector. The final £31.4bn disposal of the Stoke-based Caudwell telecoms empire to private equity tops our list in terms of the biggest value deal, while a trio of deals in the ever-busy pub sector were not far behind.
For instance in July Whitbread agreed the sale of 239 pub restaurants to Birmingham-based Mitchells & Butler in a £3497m deal which Mitchells chief executive Tim Clarke described as "exceptional value" compared with greenfield site development.
Meanwhile rival Brummie drinks empire Enterprise Inns agreed to sell 769 pubs to Admiral Taverns in a £3318m deal, while last month another of the region's big hitters, Punch Taverns, acquired Broomco, the holding company of the Mill House Group, a private pub and restaurant operator. Punch bought the portfolio from the Bank of Scotland and the management team for £3164m.
Even a Dudley bricks business got in on the dealmaking feast, albeit one of the region's most established building products groups. In August Baggeridge Brick received a dream £389m offer from Weinerberger, the Austrian brick and roof tile manufacturer. Weinerberger is number three in the European market for facing bricks and particularly wanted to add clay roof tiles to its product range.
Wolfgang Reithofer, chief executive, told investors that the deal would also help his business deal more effectively with issues such as high energy costs.
And then, lest we forget amid the miracles being performed on the pitch by Martin O'Neill, there was the sale of Aston Villa to Randy Lerner for £362.6m - a deal which many rainmakers probably felt they would never live to see.
But behind the headline grabbing, big-ticket deals, there were plenty of extraordinary stories lurking just beneath this quarter.
Take the £318.5m buyout of Derby-based fashion brand Golddigga by London venture capitalist (VC) Octopus Investments. Not a bad pay day for founder - and one-time pop manager - Aaron Thalmann who a decade ago began creating and selling T-shirts through his Designdock business.
In 1999 he founded Golddigga and has not looked back since, now selling to around 350 outlets in the UK and increasingly across mainland Europe.
If you have not got a teenage daughter you may not have haven't happened upon the brand just yet, but girls across the country buy Golddigga hoodies, T-shirts and urban streetwear in big numbers. Eighty per cent of sales are in the UK and turnover has more than doubled to £310m in two years. The business has also diversified its offering, moving into footwear, stationery and jewellery.
Roy Farmer, corporate finance partner at accountant Cooper Parry in Derby, had been working on the deal since early last year during which time he says Golddigga crucially went from being "a name into a brand".
"The business was growing so rapidly that Aaron wanted to strengthen the management team and cash in a bit at the same time. We looked at a trade sale but also started looking at private equity. We started to properly market the business just under a year ago but the missing piece of the jigsaw was finding a new chief executive."
The buy-in candidate was found in the shape of Daniel Morris who joined the business in June this year. Morris has 20 years in the trade, having worked for names like Courtaulds, Lee Cooper, World Design & Trade (WDT) and Mexx. After leaving WDT last year he had been looking for buy-in opportunities.
He says the focus now will be on growing both domestic and overseas sales backed up by a "significantly increased investment in marketing and sales support".
Thalmann, who with his family has retained a majority 80 per cent stake, is now creative director. Debt for the deal came courtesy of Yorkshire Bank.
It was not the only unheralded deal that Farmer and his team at Cooper Parry worked on this quarter.
The world of oil rig technology might seem a world away from the Midlands, but one entrepreneur in the field from deepest Derbyshire, Tony Dickenson, has just topped up his pension quite nicely.
He and fellow director of Salem Automation Derek Gennard were looking to retire and landed a sale to the Norweigan Hitec Industries group.
Farmer adds: "The pair had built a unique product over the last few years whereby they devised technology which effectively helps control and monitor the number of employees on oil rigs. A sale to a Norweigan business is the perfect result, given the country's dominance in this field, although there were a lot of potential buyers."
Legal advice to the vendors came from Eversheds in Nottingham.
Food was also on the agenda for dealmakers in the quarter, both the production and distribution of it. Yet again it was those Icelandic raiders at Baugur who got in on the act, with help from the Birmingham financial community which has supported the firm on a string of deals over the past few years.
This time it related to Woodward Foodservice and its acquisition of DBC Foodservice to create a £3500m turnover foodservice group and consolidate its position as the UK's third largest supplier to the catering industry.
Woodward, which has distribution centres in Darlaston and Digbeth, supplies a range of products including fresh fish, fresh meat, frozen, chilled and ambient food to restaurants, pubs, hotels and schools across Britain. The company has an annual turnover of £3210m and employs 1,100 people across 15 distribution sites.
The acquisition comes a year after a management buyout (MBO) led by chief executive Ed Hyslop. Hyslop led supermarket chain Iceland's original acquisition of Woodward back in 1997 and has since expanded the company into a national operator.
The latest deal was backed by existing investors Baugur and Talden. It was put together by the Birmingham offices of Lloyds TSB Commercial Finance, Catalyst Corporate Finance and law firm Browne Jacobson. Funding also came from Landsbanki Commercial Finance.
DBC Foodservice, a wholly-owned subsidiary of the Danish Crown Group, has a network of 13 distribution warehouses throughout the UK, employs 800 people and has an annual turnover of £3200m.
Hyslop says: "DBC is a successful operator and a great fit for us.
Its distribution centres will strengthen our network and give us an excellent customer base across a number of strategically important sectors."
Simon Woodcock from Lloyds TSB Commercial Finance adds: "This is a highly strategic move for Woodward giving it the critical mass it requires to expand and take advantage within what is now a £39bn market."
Staying with the food theme, another highlight of the quarter was the secondary buyout of fruit importer and distributor Empire World Trade (EWT).
Exiting venture capitalist 3i backed the primary buyout back in 1997. The latest deal was backed by Isis Equity Partners and Royal Bank of Scotland with Clearwater Corporate Finance advising on the transaction. Legal advice was provided by Browne Jacobson, HBJ Gateley Wareing, Geldards, DLA and Addleshaws.
With an £380m plus turnover EWT, based in Spalding, is a key supplier to big retailers including Tesco, Marks & Spencer and Morrisons. The company imports just under 15 per cent of the UK apple market, and last year even established its own English orchard.
ISIS Equity Partners invested £35.2m as part of the transaction. Director Richard Bucknell says: "EWT operates in a demanding market but stands out as best in class from its peers."
ISIS and Clearwater also advised the shareholders of Wiggle, the online sports clothing and equipment retailer, on an £311.5m cash-out deal. Wiggle's founders will retain a controlling stake and continue to manage the business.
Founded in 1999, Wiggle began life as a site for cycle enthusiasts but in the last couple of years has spread a winning formula to other sports categories including running, swimming, hiking and snow boarding. In the year to January 2006 it achieved sales of £312m. Clearwater first met co-founders Harvey Jones and Mitch Dall in July 2005 after identifying Wiggle as a target.
Yet another Clearwater advised deal in the quarter was the £3100m secondary buyout of Coventry vinyl flooring business Amtico. With a turnover of more than £380m, the company employs over 700 people and has plants both in the UK and the US.
The deal saw management take a significant equity stake alongside ABN Amro Capital and Electra in a classic twin-track sale process which could either have led to a trade buy or disposal to private equity.
Clearwater partner Jon Hustler said: "Amtico is a high quality business with a well respected brand. Its fortunes and prospects have been transformed over recent times following the appointment of Jonathan Duck as chief executive and James Frost as finance director. There is now a clear and focused strategy for growth which will be delivered by a strong management team."
Tom Cawley from Royal Bank of Scotland in Birmingham, which provided senior debt for the deal, singled out the transaction as a particular highlight of the quarter and symptomatic of the market in general. "Amtico is a good example of the way the market is continuing to be driven by a twin track approach and by secondary and tertiary deals. A lot of people say they are busy but the likelihood is that a lot of them are working on the same deals.
If you started playing bingo with work in progress you might find everyone circling the same numbers."
However it wasn't just all about buyouts this quarter.
Flotations also made a return of sorts, most notably with the listing
of Nottingham-based Experian (see cover story page 18). Another eagerly awaited listing for the region will also be that
of Dunelm, the soft furnishings retailer which began life when Jean Adderley and her husband Bill started selling curtains on a Leicester market in 1979.
Dunelm has grown into one of the UK's largest homeware retailers with 82 branded stores mainly on out-of-town sites in the Midlands and North West. Mrs Adderley, who retired five years ago, will sell her stake of about 30 per cent in a listing at the end of this month which should value the company upwards of £3350m.
Bill Adderley is retaining his 50 per cent stake. Their son Will, who took over as chief executive in 1996, has ambitious plans for the business, aiming to raise the number of stores to 150.
And finally, many rainmakers pointed to a rise in international deals in the quarter. Stephen Kitts, head of corporate at law firm Eversheds, remarked: "Cross-border deals have definitely been on the rise as businesses in the region look to spread their wings beyond the UK and foreign firms eye investment opportunities in the Midlands."