Key mergers and acquisitions - March/April
Date posted: 9th May 2014
After experiencing a somewhat quiet start to 2013, the global mergers and acquisitions market has witnessed much improvement in early 2014. Just one year ago, figures were at their lowest since records began in the 80s, but a corner looks to have been turner thanks to improved market sentiment and growth in business optimism. Just in the last two months alone, a flurry of deals has been announced, just some of which have been detailed below.The Money Shop
The Money Shop, which was a payday lender long before the young pretenders including Wonga came along, has seen its owner - Dollar Financial - bought out by private equity house Lone Star for £780 million. Dollar Financial was looking for an out after issuing a profit warning that was linked with heavy new regulatory crackdowns brought in across the UK. Such regulations will see lenders prevented from rolling over a short-term loan more than twice, which could have a massive impact on The Money Shop and others like it.
House of Fraser
Controversial entrepreneur Mike Ashley got involved in the House of Fraser buyout during April, as he sought to derail plans from Chinese business owners to take over 100 per cent of the department store. Sports Direct and Newcastle FC owner Ashley was said to have been so unimpressed with the Sanpower bid he chose to put forward around £50 million of his own money to buy an 11 per cent share, thereby leaving the Chinese conglomerate having to make do with the remaining 89 per cent.
Online takeaway order service Just Eat is hoping to bolster its business offering with the purchase of Birmingham-based Meal2Go. The acquisition will see Just Eat take on the technology to provide its restaurants with a central system for managing orders. This, it is said, will not only help its customer service credentials but also provide restaurants with more efficient marketing. Just Eat, which was set up in Denmark, now runs out of offices in London and generates revenue of £700 million from operations in 13 countries.
Legal & General
UK financial services giant Legal & General has taken over a property portfolio backed by the Royal Bank of Scotland (RBS). The £550 million deal has seen Legal & General take over numerous properties in London, including the Coutts headquarters on the Strand and a Grade II-listed Mayfair office currently occupied by NatWest. This deal was dubbed by Legal & General’s director of investment and development, Gordon Aitchinson, as “one of the largest acquisitions to be successfully undertaken by a UK fund in recent years.”
Since securing private equity backing in 2011, Kitwave Wholesale has rarely seemed to be out of the mergers and acquisitions news. Now it has secured its fourth deal in three years after snapping up frozen food wholesale and distribution firm Eden Farm for an undisclosed amount. This adds to the Anderson Wholesale, Automatic Retailing and Teatime Tasties it bought since signing the £7.5 million private equity deal in 2011.
Another firm that has set about on a run of acquisitions after securing private equity backing is London-based Connect Communications. The unified communications and call centre software technology provider has undergone a management buy-out in association with LDC. It is hoped the deal will help Connect Communications bolster its technology and service portfolio.
The UK arm of Toronto-based Prism Medical has been sold to LDC (the equity investment arm of Lloyds Banking Group) for a reported £30 million. The provider of hoists, shower chairs and other medical lifestyle aids is expecting to see an injection of growth capital as part of the deal. It is also hoped the agreement would help Prism Medical not only expand across the UK but enter other “key European markets” in the coming years.
Learning Technologies Group
In a bid to establish itself as the UK market leader in e-learning custom content, the Learning Technologies Group has snapped up LINE for £9 million. The specifics of this deal will see £5.1 million paid out in cash, with the remaining £3.9 million handed over in shares. The aim is to provide a strong, unified service in the ‘fragmented’ e-learning environment. With a deal now done, the combined business is thought to boast around 150 staff members across London, Brighton, Sheffield, New York, Zurich and Rio de Janeiro.
OmniCom Media Group
Following on from the proposed ‘mega-merger’ of OmniCom and Publicis last year, the former has been at it again - this time securing UK mobile marketing agency Mobile5 for an undisclosed amount. Mobile5 counts - among others - Canon, Trinity Mirror and Samsung among its clients. The agency has come a long way in the three years it has been operational and now boasts a staff count of more than 30. The deal will see Mobile5 work as a separate agency within OmniCom’s London offices.
Not happy with seeing nearest rival Facebook hit the headlines with its acquisitions, Twitter got involved as well, taking on not one but two global firms. First came French company Mesagraph, before Twitter turned its attention to the UK, or more specifically, SecondSync. The company - which has offices in London and Bristol - analyses conversational data taking place around the UK on TV programmes. This is also a large part of what Mesagraph does as well, which should give a clear indication as to the direction Twitter is expecting to head in the coming years.
Fyffes and Chiquita
Two of the world’s best-known banana brands, Fyffes and Chiquita, have announced they are to join forces in a bid to become the largest organisation of their kind on earth. It could see the two generate £2.75 billion in sales and hand over 80 per cent of the world’s total banana market to the hands of just three companies. Fyffes is now sited in Dublin after growing out of a market in the 1800s which involved shipping to Bristol, whereas Chiquita is based in the US.
These are just some of the huge deals which have been signed during March and April 2014. This rapid expansion looks set to continue, as a number of other large-scale deals are expected to be pushed through some time in the coming quarter. If all goes to plan, this could include a merger between Dixons and Carphone Warehouse, as well as a number of deals emerging from 3 Rivers’ foray into Britain, which was undertaken solely with acquisitions in mind.