Category: Finance

Apple Buys Beats: What Does it Mean?
Corporate Finance and M&A/DealsFinance

Apple Buys Beats: What Does it Mean?

Apple, the company that transformed digital music into a worldwide phenomenon, confirmed on 29 May that it was buying Beats Electronics for US$3bn. This is a move that will help Apple reinforce its position in the new world of streaming music and stay ahead of the personal accessories explosion.

New research from Futuresource Consulting provides market context which reveals the full extent of the market opportunity.

The global consumer electronics (CE) market has been moving skywards since the recession of 2009, but with growth confined to mobile devices and the emerging markets. Many CE brands are struggling as more competitors enter from China and new brands compete in high growth niches like wireless audio.

Since 2009, total CE sales have risen at 9% CAGR, reaching US$676bn worldwide in 2013. However, the European market has slumped from 26% of global CE consumption in 2009 to just 21% in 2013. Meanwhile, emerging markets have grown to account for an estimated 50% of worldwide CE market value in 2013, China’s domestic market alone accounting for around 15%.

Audio has been relatively buoyant, spurred by the boom in mobile music and streaming services, which have driven demand for accessories like wireless speakers and headphones. Sonos, which has pioneered wireless music systems, doubled sales to US$535mn in 2013. Beats Electronics, launched just five years ago, has become the market leader in high end headphones and enjoyed estimated sales of over US$1.5bn in 2013. Pure, which drove DAB hardware in the UK, is now pushing into networked audio players.

Ironically, Apple, which started the MP3 revolution, has seen iPod sales decline sharply as smartphones have taken on the role of music player with many consumers.

From a music streaming angle, consumer spend on global music subscription services such as Spotify and Deezer was estimated to be just under US$2bn in 2013.

There is still significant potential for the market to grow, with music subscriptions accounting for just 10% of the total music market spend last year, equivalent to around 25% of the digital music market. This is expected to exceed US$5bn in 2017, equivalent to 30% of global music market spend. In comparison, spend on online video subscription services such as Netflix last year was almost US$5bn.

In Sweden, music streaming accounted for around 70% of total market spend in 2013, up from around 20% in 2010.
Many consumers are moving away from ownership towards an access model, for both music and video. Total “pay per download,” for example track and album downloads from services such as iTunes, declined in the USA last year, significantly down in Sweden and stabilising in the UK. Some consumers are changing their behaviour and this is impacting ownership, although most music buyers are still in the transition somewhere between buying CDs, buying digital tracks and albums – with the final step paying for a streaming subscription service such as Spotify.

Paid-for streaming subscriptions are increasingly driven by in-home wireless audio products, such as wireless speakers (e.g. Sonos) and integrated Hi-Fi with airplay, Bluetooth and the like.

Global shipments of wireless home audio products grew by over 100% in 2013 to reach 27 million units. Futuresource’s latest Living With Digital consumer research indicates that owners of such devices are 2.5 times more likely to pay for a digital music subscription compared to the overall population.

Are Gift Aid Small Donations Working?
FinanceSustainable Finance

Are Gift Aid Small Donations Working?

Charity Finance Group, the Institute of Fundraising and the National Council for Voluntary Organisations (NCVO), have released a new survey to find out how the Gift Aid Small Donations Scheme is working.

Following recent figures released from HMRC which show £7million had been claimed in the first year of the Gift Aid Small Donations Scheme, this new survey aims to find out the experience amongst the voluntary sector on how the scheme is working. Estimates from government forecasted the Gift Aid Small Donations Scheme could bring in around £50 million a year for charities.

Anna Bloch, Senior Policy and Public Affairs Officer at Charity Finance Group said: “As early indications show that the government’s Gift Aid Small Donations scheme has fallen well below the intended target, we want to understand why this is happening. A number of reasons could be responsible such as a lack of clarity around the eligibility criteria or an overly burdensome claiming process. This research will allow us to have an informed conversation with government about how to improve the scheme, so that the sector can make full use of the value of this scheme. It is crucial that government engages with the sector on this issue to ensure the effective use of charitable funds.”

Daniel Fluskey, Head of Policy and Research at Institute of Fundraising said: “We want to see the Gift Aid Small Donations Scheme be as successful as possible, contributing extra resource to thousands of charities’ income. With only £7million claimed so far, we think this is the right time to explore whether the scheme is operating as well as it can and for organisations to tell us their experience of the scheme. We want to know whether the scheme is easy to use for those charities who have made a claim and find out the reasons why others have not yet done so. We hope that this survey provides us with some useful knowledge that enables us and government to best ensure the scheme is a success.”

Cultural Integration a Problem in M&A
Corporate Finance and M&A/DealsFinance

Cultural Integration a Problem in M&A

Lack of cultural integration process and planning as well as top talent flight are key people-related M&A concerns for senior business leaders the world over, according to a recent survey by financial services company Mercer.

In fact, throughout Asia, Latin America, North America and Europe, approximately one third to one half of respondents said that they have no process for assessing culture and leveraging results. These same deal leaders are also very worried about top talent leaving their organisations soon after M&A deals close, with 75 to 80% saying that they are “very” or “moderately” concerned.

“M&A activity poses multiple challenges for companies in today’s global economy, requiring innovative and practical strategies for retaining key talent and integrating organisational cultures,” said Graham Pearce, Leader for Mercer M&A Europe. “This is especially true for companies in markets where high levels of employee mobility and significant differences in workplace and local cultures make post-deal integration challenges a threat to the company’s performance.”

On a positive note, business leaders acknowledged that people-related issues are gaining more prominence in M&A situations than in the past. This is particularly true in Asia, where a full 84% agreed that people issues are more prominent, followed by Latin America (62%), North America (60%) and Europe (47%).

Thomson Reuters Election of Board Members
Corporate Finance and M&A/DealsFinance

Thomson Reuters Election of Board Members

Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, has announced the election of three new members to the company’s board of directors at the company’s annual meeting of shareholders, held in Toronto.

Sheila C. Bair, 60, is a Senior Advisor to the Pew Charitable Trusts, and currently serves as a member of the boards of Host Hotels & Resorts and Banco Santander. Bair previously served as the Chair of the Federal Deposit Insurance Corporation and has held senior positions at the New York Stock Exchange, Commodity Futures Trading Commission and the US Department of the Treasury.

Michael E. Daniels, 59, is currently a member of the boards of SS&C Technologies Holdings and Tyco International, as well as a trustee of Holy Cross College. Daniels previously spent 36 years with IBM where he held senior roles in sales and technology.

P. Thomas Jenkins, 54, is Chairman of OpenText Corporation and has served as a member of its board since 1994. Jenkins served as President and Chief Executive Officer of OpenText from 1994 to 2005. Jenkins previously served in several managerial and technical capacities at various technology companies.

“We are fortunate to welcome three exceptional new directors,” said David Thomson, chairman of Thomson Reuters. “We are honoured to draw upon their deep experience, expertise and perspective as we continue to grow our global business.”

The company also today announced that David W. Binet has been appointed Deputy Chairman of the Board of Directors. Binet is President and Chief Executive Officer of the Woodbridge Company Limited, and has served as a director of Thomson Reuters since January 2013.

IPO Deals on the Up
Corporate Finance and M&A/DealsFinance

IPO Deals on the Up

The market for initial public offerings (IPOs) has been exuberant as uncertainties over the US “fiscal cliff” and eurozone debt crisis have diminished and corporate confidence returns, according to a strategist at private bank Coutts.

James Butterfill, Global Equity Strategist at Coutts, says that Though UK IPOs are showing some signs of frothy prices, the deals keep coming, and IPOs in the UK so far this year (58 deals worth US$13bn in total) have almost matched the total value of last year’s new listings. “The key difference to last year is that IPOs are being priced at the lower end of their ranges due to concerns over market valuations. Many issuers have been retailers, such as Poundland and Pets at Home, with deal sizes typically at the smaller end – up to US$100m,” he says.

“However, whereas last year’s UK IPOs appreciated on average by 16% by year end, this year has been more challenging, with shares down by 5% on average since listing. This contrasts with the US, where average IPO gains have been 10%, and also lags the 4% gain achieved across the rest of the world.

“Amid the UK IPO fever, concerns have emerged that investors may be suffering from flotation fatigue. Fat Face, the retailer, pulled its planned London flotation after citing weak economic growth and doubts as to whether it would raise the funds it was seeking. Other deals press forward at the low end of their valuation range, albeit still on a higher multiple of earnings (PE) than the London market average.”

London remains an attractive market on which to list shares, reflecting the UK’s attractive corporate tax rate and the London market’s liquidity and proven track record,” says Butterfill. “Investors may be more wary of valuations, but a flurry of upcoming deals led by Zoopla, Wizz Air and River & Mercantile confirm that investor appetite remains.”

Unilever Simplifies Plc Share Structure
Corporate Finance and M&A/DealsFinance

Unilever Simplifies Plc Share Structure

Unilever has announced that it has purchased, for a consideration of £715m, the rights left in family trusts by William Hesketh Lever which are convertible in 2038 into 70,875,000 Unilever PLC ordinary shares. The consideration is equivalent to £10.09 per ordinary share and represents a discount of 63% to the closing share price on Friday May 16th 2014.

As a result of this transaction core earnings per share will be enhanced by 2% on a full year basis as the fully diluted share count used in the calculation is reduced by 70,875,000 shares, or 2.4% of the combined Unilever Group total.

Jean-Marc Huët, Unilever CFO, said “I am very pleased that we have concluded this agreement with the trusts. It is good for all our shareholders. It is another step in the simplification of Unilever’s capital structure, making Unilever easier to understand, and eliminating ahead of time the burden of a significant dilution of shareholders’ interests.”

AstraZeneca Rejects Final Pfizer Takeover Offer
Corporate Finance and M&A/DealsFinance

AstraZeneca Rejects Final Pfizer Takeover Offer

AstraZeneca, the UK drugs company, has rejected a “final” takeover offer from US drugs firm Pfizer.

Pfizer had offered £53.50 on Friday but AstraZeneca told Pfizer at the weekend that the price needed to be at least 10% higher, valuing AstraZeneca at about £74 billion.

Pfizer made a new offer of £55 per share, valuing AstraZeneca at about £69 billion, an offer that AstraZeneca’s chairman Leif Johansson said did not meet the price that the US company was told was necessary.

AstraZeneca’s shares fell 14% to £41.45 after news broke of the rejection.

Pfizer’s moves to take over AstraZeneca have been surrounded by controversy, with politicians and unions expressing fears that a takeover would hinder AstraZeneca’s drug research and lead to job losses among the firm’s 6,700-strong UK workforce.

Pfizer planned to create the world’s largest drug company, with its headquarters in New York, but based in the UK for tax purposes – a strategy known as “tax inversion” whereby Pfizer could pay the UK corporate tax rate of 20%, rather than the 35% rate applied in the US.

Johansson said Pfizer’s pursuit had been “fundamentally driven” by the corporate financial benefits, adding that “Pfizer has failed to make a compelling strategic, business or value case.”

Pfizer had said that its improved offer of £55 per share was “final” and could not be increased.

Fujitsu Appoints Michael Keegan as Head of UK & Ireland
Corporate Finance and M&A/DealsFinance

Fujitsu Appoints Michael Keegan as Head of UK & Ireland

Fujitsu has announced it has appointed Michael Keegan as Head of its £1.8 billion business in the UK and Ireland. Keegan’s new role sees him take the reins from Duncan Tait, who was recently promoted to Head of EMEIA, Corporate Senior Vice President, Fujitsu Ltd.

Keegan has worked at Fujitsu for a number of years and has spent the last three and a half years leading Fujitsu’s successful Technology Products Group for the UK & Ireland. His appointment comes on the back of solid growth for Fujitsu UK & Ireland under Tait’s tenure. Having built a strong foundation and focus for the company, Tait led the company to 12 consecutive quarters of growth during his three year time in the role. Under Keegan’s leadership, the business will focus on growth in the Private Sector and Defence, as well as its strategic work in Government and driving success in its product business units.

“Michael has the breadth of commercial experience that is required to continue to drive the UK & Ireland forward,” said Duncan Tait, Head of EMEIA, CSVP, Fujitsu Ltd. “With nearly thirty years’ experience in the IT sector, and over six years leading various business units for Fujitsu UK & Ireland he has a proven ability to lead and accelerate growth.”

Keegan’s experience in the IT sector includes holding senior leadership roles at the Royal Mail Group/Post Office Ltd, Magex, MasterCard and Nat West. Since joining Fujitsu in 2006, he has worked across a number of business units, including Government. Keegan will report directly to Duncan Tait in his new role.

Keegan’s promotion to the head of the UK & Ireland forms part of a larger restructure for Fujitsu, promoting increased collaboration amongst business units as the company seeks to take advantage of growing globalisation in the ICT market. This has resulted in the creation of larger regions, all of whom report directly in to the Japanese headquarters. The UK & Ireland will become part of the EMEIA region enabling Fujitsu to serve its regional and global customers more efficiently and effectively.

Charles Russell Appoints Islamic Finance Expert
FinanceIslamic Finance

Charles Russell Appoints Islamic Finance Expert

Law firm Charles Russell LLP has appointed Ashley Freeman to head up the Islamic Finance practice in the firm’s Financial Services team. Freeman, who joins the firm as Senior Counsel, has extensive global banking and financial services experience, encompassing strategic, transactional and regulatory matters in both Islamic and conventional industries.

Freeman has expert understanding of cross-border and comparative law issues; particularly the inter-play between common law, civil law and Shari’ah precepts. His arrival reinforces the breadth of Charles Russell’s financial services practice and the growing demand for Islamic finance expertise in the UK market.

Freeman’s expertise, developed through many years’ experience in-house at the Central Bank of Bahrain and in private practice with City of London firms, includes bank mergers, acquisitions, conversions, receiverships, restructurings and insolvencies. He has considerable transactional experience, including experience of asset-backed finance, project finance, acquisition finance, property finance, leasing finance and all Islamic financing techniques. Freeman also has excellent knowledge of equity and securities funding, securitisations, asset and fund management, insurance and takaful, financial trades, derivatives and payment systems.

Freeman has documented and directed the documenting of numerous multi-million dollar lending facilities and bond issues (including several sovereign issues) and other complex funding transactions. He will work closely with Jon Bond in the London office and Wesam Alshafei in the Bahrain office and will be instrumental in expanding the team’s capability.

Commenting on the appointment, Jon Bond, Head of the Financial Services sector at Charles Russell, said: “Ashley’s arrival is a testament to the firm’s focus and continued success in the Financial Services sector. Ashley brings significant experience in Islamic Finance, particularly in the UK and Middle East and this together with his broader banking experience will further enhance our offering to our clients. We are delighted to have him on board.’’

Ukraine Crisis Hits Investor Confidence in Russia
FinanceForeign Direct Investment

Ukraine Crisis Hits Investor Confidence in Russia

In addition to souring relations between Russia, Europe and the United States, further escalation of Russia’s engagement in Ukraine could cost Russia more than 3 percent in GDP in real terms or USD115 billion in current dollar terms on average in 2015, according to global information company IHS.

The conflict could also exacerbate recessionary pressures, and lead to a reduction in European real GDP of about 0.15 percent overall.

Russia’s economy, already likely in recession, will dampen further in the face of a deteriorating political situation; tougher sanctions; falling investor confidence; and a business climate worsened by fears of retaliation against western companies that produce in or sell to Russia, according to the IHS scenario.

A severe slowdown of Russia’s economy in the second half of 2014 and continuing into 2015 would lead to a reduction in European real GDP growth by about 0.15 percent overall, but with large variations between countries, the IHS study says. Most affected would be traditional machinery and equipment and chemical products’ exporters such as the Netherlands, Belgium and Germany. Also impacted would be Italy and Spain, as would countries highly dependent on Russian imports, such as Finland.

Additionally, non-European economies stand to suffer from the slowdown. Among these are Argentina, Australia and Brazil, who would suffer from lower world demand for their commodity and manufactured exports, triggering spill-over effects on their own trading partners in Asia and Latin America.

IHS economists developed the scenario in response to heightened tensions brought about by Russia’s annexation of Crimea and its ongoing dispute with Ukraine following the ouster of Ukraine’s president and scheduling of new elections in May.

IHS Chief Economist Nariman Behravesh said: “While Russia could end up paying a very heavy economic price for its annexation of Crimea and its ongoing conflict with Ukraine, the negative impacts on other parts of the world, notably Europe, will also be hard to avoid.”

Change Needed for Sustainable African Growth
FinanceSustainable Finance

Change Needed for Sustainable African Growth

Sustainable economic growth in Africa will require a step change in approach from both investors and governments, according to new research released today by FTI Consulting, Inc., the global business advisory firm dedicated to helping organisations protect and enhance their enterprise value. The research reveals major shortfalls in the way governments attract investment, as well as how companies engage with key stakeholders.

The research, based on the opinions of investors, political and business leaders attending the World Economic Forum on Africa, shows that public opinion now holds significant influence over the business operating environment in Africa. Despite this, 76 percent of those polled believe that companies do not effectively communicate the benefits that their investment brings to their host countries. As nations in Africa become more discerning towards Foreign Direct Investment (“FDI”), a poor communications strategy could jeopardise the initial approach and long-term success of a company’s investment.

On the other side of the investment partnership, host governments must review the way they attract and handle FDI. The research conducted by FTI Consulting shows that 73 percent of those surveyed believe that governments have not been very effective in encouraging investment, and 79 percent think governments impose unreasonable expectations on investors. Although the benefits of investing in Africa are widely recognised, 52 percent of respondents believe investment still comes loaded with risk. This, compounded by unfair demands from governments may deter future investors.

“Companies need to modernise their approach to investing in Africa. The old way of doing business, isolating a company and its investment from the local and regional communities, is no longer effective. Rather than putting barriers around investments, engagement is now the key to recognising and avoiding the risks so many are still concerned about,” said Mark Malloch-Brown, Chairman of the Europe, Middle East and Africa region at FTI Consulting.

Lord Malloch-Brown continued, “Governments have a pivotal part to play in communicating the tangible benefits of FDI. Although natural resources have created pockets of wealth in certain nations, 51 percent of those we polled believe oil has hindered sustainable economic growth in Africa. Future success in Africa relies on companies and populations sharing wealth and growing in tandem. Host governments have an important part to play in brokering partnerships that allow African people to access the benefits that FDI brings.”

Ryanair Expands 737 Fleet
Corporate Finance and M&A/DealsFinance

Ryanair Expands 737 Fleet

Boeing and Ryanair have finalized an order for five additional Next-Generation 737s, valued at $452 million at list prices. Today’s announcement brings the total number of unfilled Next-Generation 737 orders for the Ireland-based ultra-low-cost carrier to 180 airplanes.

“The 737-800 is the perfect airplane for us as we continue to expand our fleet to cater to both business passengers and tourists who want to visit and explore Europe at affordable, reliable rates,” said Michael O’Leary, director and CEO of Ryanair. “The addition of these highly efficient airplanes will help provide our customers with additional options when it comes to planning their travel.”

The airline announced last year an order for 175 of the airplanes. Ryanair is the world’s largest 737-800 customer, with orders placed for 528 of the type to date.

The Boeing 737-800 is the best-selling version of the highly successful Next-Generation 737 family. Known for its reliability, fuel efficiency and economical performance, the 737-800 is selected by leading and low-cost carriers throughout the world because it provides operators the flexibility to serve a wide range of markets.

“Ryanair and Boeing share a rich history together. The 737-800 offers strong operating economics and will provide comfort and reliability to Ryanair passengers,” said Boeing Commercial Airplanes President and CEO Ray Conner. “We are honored to be chosen by Ryanair as they expand their fleet and look forward to continuing our partnership for decades to come.”

Headquartered in Dublin, Ryanair operates more than 1,600 flights daily from 68 bases connecting 186 destinations in 30 countries. Currently operating more than 300 737-800s, Ryanair took delivery of its first in 1999, and now operates the largest fleet of Boeing airplanes in Europe. 

Today’s announcement brings the total number of 737s ordered to date to more than 11,000. Boeing currently has more than 3,700 unfilled orders for 737s.

Increasing UK Car Production Driving M&A in Supply Chain
Corporate Finance and M&A/DealsFinance

Increasing UK Car Production Driving M&A in Supply Chain

The increase in UK car production is driving substantial growth in automotive supply chain mergers and acquisitions, according to a leading industry expert.

KPMG’s UK Head of Automotive, John Leech, said KPMG has acted as corporate finance advisor to vendors of automotive suppliers on five separate successful deals in the last seven months and he expects activity to increase.
“The reason for this is fast-growing UK car production, notably by Jaguar Land Rover which is requiring suppliers to attract investment to expand capacity and set up overseas facilities,” he said.

KPMG’s automotive M&A specialist, Simon Heath, said “Buyers include automotive suppliers from US, China and Europe but also private equity excited by forecast growth in UK car production to two million vehicles in 2017 which might see the UK beat its all-time production record.

“And it’s not just the pure growth in production that is attracting these buyers; there is an on-shoring trend gathering momentum as UK car manufacturers highlighted a desire to onshore over £3 billion of parts currently supplied from overseas in 2012. Our own analysis shows this on-shoring figure has grown substantially since then.”

Overseas trade buyers are frequently under pressure to follow and co-locate with their manufacturers, and so many pure Asian or North American suppliers are considering European acquisitions to grow their global footprint, said Heath. At the turn of the year, Ford announced plans to cut its number of suppliers by 40%, and so the pressure to internationalise is intense, he added.

“The UK has risen up the list of favourable locations within Europe to invest in. We have a clear growth story, premium carmakers enjoying attractive margins and the most joined-up industry and government in Europe with a focus on supporting innovation such as low-carbon vehicles,” he said.

Latest figures from the Society of Motor Manufacturers and Traders (SMMT) revealed that car production had grown by 12% in March, driven by demand from the EU.

Corporate Finance and M&A/DealsFinance

GE Capital Announces Seventh Unitranche Deal

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GE Capital International and Ares Management Ltd. announced today that the European Senior Secured Loan Programme (ESSLP), a €1.7bn joint venture between the firms, has completed its seventh transaction with the closing of a £153m unitranche facility to refinance Parkdean, a holiday park operator in the UK owned by Alchemy. Ares provided an additional £27m of subordinated debt to complete the £180m refinancing package.

This transaction brings the total commitments to more than €800m in unitranche financing provided through the ESSLP since the programme was launched in 2013. The ESSLP has provided financing to support private equity-backed businesses across Europe and spanning a wide range of sectors, including the recent refinancing of NoteMachine owned by Corsair and Montagu’s acquisition of Dutch Ophthalmologic Research Centre (D.O.R.C).

Owen Verrier Jones, Head of Mid-Market Origination at GE Capital International, said: “This latest transaction demonstrates the benefits of scale, flexibility and ease of execution of our unitranche partnership, which is becoming an increasingly popular alternative to traditional senior debt structures in the mid-market. Parkdean is one of the best operators in the market with a first rate management team at the helm. We’re delighted to support them as they look to further grow their business.”

Mike Dennis, Partner at Ares Management Ltd., said: “We are delighted to partner with both Alchemy and Parkdean’s management team on this transaction. By providing both the unitranche with our partners at GE and a subordinated tranche of debt, we clearly demonstrated our ability to tailor solutions to the borrower’s needs as well as our flexible and innovative approach to the European Direct Lending market.”

This latest deal follows the recent announcement that GE Capital International and Ares Management Ltd. were named the joint “Unitranche Lenders of the Year” for 2013 by Private Debt Investor. Parkdean were awarded Best UK Holiday Park Operator at the 2013 British Travel Awards .

Harris Williams & Co. Advises Telecoms Firm on Significant Investment
Corporate Finance and M&A/DealsFinance

Harris Williams & Co. Advises Telecoms Firm on Significant Investment

The investment, completed on April 17, 2014, was led by bankers from Technology, Media & Telecom Group as well as from Harris Williams & Co.’s London and San Fransisco offices.

“Upstream has delivered tremendous growth over recent years, which is testament to the strength of the management team and of the demand fulfillment marketing platform it has developed since its inception in 2001,” said Thierry Monjauze, head of Harris Williams & Co.’s London office and a managing director in the firm’s TMT Group.

“Following the investment, Upstream will leverage Actis’ relationships and expertise to expand its customer base and solution suite and drive continued expansion,” added Mike Wilkins, a managing director in Harris Williams & Co.’s TMT Group.

Upstream is the industry leader in emerging markets mobile monetisation. Upstream works with mobile operators, ecommerce brands and app developers in 40 markets helping them to sell their products to mobile consumers through sophisticated demand fulfillment marketing campaigns, while increasing customer loyalty and providing deep customer insights. Its clients include the Vodafone Group, Telecom Italia Mobile (TIM), MTN, T-Mobile and Etisalat. Upstream has direct marketing and billing access to more than 1 billion emerging market consumers through their mobile handsets, offering them personalised propositions. The company has already generated an estimated $1 billion of incremental revenue for its clients and grew its revenues by 61% in 2013 with new services and markets being added on a monthly basis.

“Actis has a first-class reputation as an emerging market investor. Its track record of partnering with founder and entrepreneur management teams is exceptional,” commented Marco Veremis, CEO and founder of Upstream. “Upstream will benefit from Actis’s deep expertise in emerging markets and its highly complementary regional presence. Upstream’s founders and management team are glad to see Actis subscribing to our vision and look forward to a close collaboration in executing our high growth strategic expansion plan for the coming years.” Veremis has led the business since its foundation and will continue to lead the company after Actis’ investment.

Actis invests exclusively in the emerging markets with a growing portfolio of investments in Asia, Africa and Latin America; it currently has $7 billion funds under management. Combining the expertise of more than 120 investment professionals on the ground in nine countries, Actis identifies investment opportunities in three areas: private equity, energy and real estate. Actis is proud to actively and positively grow the value of those companies in which it invests and in so doing, contribute to broader society.

Harris Williams & Co., a member of The PNC Financial Services Group, Inc. (NYSE:PNC), is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements and capital markets advisory services.

Harris Williams & Co.’s TMT Group has experience across a broad range of sectors, including software, internet and digital media and infrastructure solutions. Within these segments, the TMT Group focuses on targeted subsectors including application software, data and informatics, eCommerce, education technology, energy technology, financial technology, healthcare IT, infrastructure software, IT and tech-enabled services, mobile, online advertising and marketing services, public sector software and telecom, data center and networking solutions. For more information on the firm’s TMT Group and other recent transactions, visit the TMT Group website.

Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.

Temenos Appoints Martin Frick as Head of APAC
Corporate Finance and M&A/DealsFinance

Temenos Appoints Martin Frick as Head of APAC

Temenos, the market-leading provider of mission-critical solutions to the financial services industry, has appointed Martin Frick as Head of APAC, based out of the group’s Singapore office.

Martin brings over 20 years of relevant experience in banking and banking technology. In this career, Martin has been a Senior Executive of Raiffeisen Bank in Switzerland as well as Executive Director and Head of Custody Processing Service at UBS. More recently, Martin has been working in banking technology and was previously Managing Director of Asia Pacific for Avaloq. He is a qualified economic computer scientist, and has an MBA.

Temenos already has a very strong reputation and track record in the APAC market. In 2013, the APAC business grew licensing by 19% and now boasts revenues of over USD100m, serving more than 150 customers, including Bank of Shanghai and Bank Sinopac. Martin’s appointment will strengthen Temenos’ APAC team, positioning it to take advantage of the very strong growth being seen in the market as a whole, with industry analyst Gartner forecasting the APAC banking-software market to grow at a CAGR of over 9%, reaching USD 2.7 billion in 2017[1]. In conjunction with Martin’s appointment, you can read his perspective on the private wealth market and APAC here.

Martin Frick, Head of APAC, Temenos, commented: “I am delighted to have been appointed to head up Temenos’ APAC region. My decision to join Temenos was based on its reputation as the market-leading vendor of banking software across the retail, microfinance, Islamic, corporate and private wealth markets. It was also influenced by Temenos’ strong global presence, its market momentum, its industry-leading levels of R&D and its multi-product set. I am proud to be part of a company that has such a good standing within banking technology, and such a great future ahead of it.”

Corporate Finance and M&A/DealsFinance

Steve Back Joins Emerisque Brands as Operating Partner

Emerisque Brands, a specialist, growth-oriented private equity sponsor based in Mayfair, has announced that Steve Back has joined the firm as an Operating Partner.

Back’s initial focus is assisting the executive management of the firm’s Italy-based fashion portfolio, consisting of MCS Group (MCS menswear) and Industries Sportswear Company S.p.A. (Henry Cotton’s, Marina Yachting, Coast Weber Ahaus and the licensed brand 18CRR81 Cerruti).

Most recently, Back was recruited to restructure and take private Monsoon plc, a UK- based fashion retailer and was ultimately named its Chief Executive Officer.

Under his tenure there as Chief Commercial Officer, Back negotiated and repaid the company’s debt; restoring the c. £1 bn Monsoon to £100m EBITDA profitability. He was previously Chief Executive Officer of the supermarket group, Sommerfield PLC, in the mid 2000’s and oversaw an accelerated growth plan there which led to £1.5bn growth in the first year and a subsequent take-private transaction in a deal valued at £1.1 bn. Mr. Back has held a number of other executive and financial positions during his career in the retail industry, including with Laura Ashley Ltd., Chef & Brewer Group Ltd., Ryman Group, Grand Metropolitan Retailing and Budgens Stores Ltd.

“We are delighted Steve has joined Emerisque,” said William Knight, of Emerisque Brands. “His proven experience, specializing in sustainable business building and business recovery, supply chain efficiencies and financial and operational restructuring will be enormously helpful in creating value within the portfolio.”

Adyoulike Announces Major UK Acquisition
Corporate Finance and M&A/DealsFinance

Adyoulike Announces Major UK Acquisition

Adyoulike, the French native technology platform and network, has announced that it has acquired Content Amp, the UK’s leading native distribution and content service.

The combined company had a turnover in 2013 of $5million. The expected turnover for what will be Europe’s first pure-play native advertising company will be around $10million in 2014.

Adyoulike has pioneered native advertising in France since its backing by French venture capitalist Banexi Ventures Partners in October 2012. The company is now seizing on the buzz around native with the first of a planned string of European acquisitions, starting with Content Amp in the UK market.

Content Amp will rebrand as Adyoulike UK. The acquisition will see the founders of Content Amp, Francis Turner and Dale Lovell, join the Adyoulike management board and run the UK division of Adyoulike. This will entail expanding native advertising formats into the UK market.

Julien Verdier, CEO of Adyoulike, comments: “This acquisition creates an immediate market leader in the European native advertising space. In Content Amp we have identified an experienced team that is as excited about native advertising as we are. Their expertise in all things content, plus extensive brand, publisher and agency contacts in the UK and combined with our market leading native advertising technology, is the perfect fit for Adyoulike to lead the expanding UK and European native advertising market.

“We have found a UK partner that shares our vision and strategy to turn Adyoulike into a global native advertising technology provider. “

Francis Turner, Content Amp co-founder and newly appointed managing director of Adyoulike UK, adds: “The native advertising market continues to be 2014’s hottest topic for brands, publishers and agencies. We have been running native campaigns over the last 12 months and have seen great advertiser appetite and outstanding results and performance, particularly when compared to stagnating and commoditized traditional display. There are a number of great opportunities to grow the Adyoulike native advertising solution in the UK.

“As one entity, Adyoulike and Content Amp offer a wealth of content expertise and native advertising options that solve many of the challenges around creating and distributing branded content, bringing a scalable solution to brands and agencies. We will be the only company of our type in the UK market.”

Philippe Herbert of Banexi Ventures Partners adds: “Adyoulike’s strategic position in native advertising perfectly fits our search for future leaders of digital advertising, bringing creativity and scalable distribution together. The UK deal is very much in keeping with this strategy as Adyoulike expands globally. We are confident that Adyoulike is set to become a global leading native advertising network, as native advertising is the biggest trend in digital marketing of the last two years.”

Brooks MacDonald Group Plc Acquisition of DPZ Capital Limited
Corporate Finance and M&A/DealsFinance

Brooks MacDonald Group Plc Acquisition of DPZ Capital Limited

Highlights:

• Acquisition of Jersey based DPZ for an initial consideration of £5.7m, made up of £3m in cash and the issue of New Ordinary Shares in the Group at a value of £2.7m. The total consideration payable by the Group will not exceed £13m, which includes c.£1m of net current assets.

• Significant expansion of, and enhancement of the skills and offering of, the Group’s international and offshore division.

• Expected to be earnings enhancing in the full year to June 2015.

• Increases pro forma discretionary funds under management by £360m to £6.04bn.

DPZ is a well-established wealth management business based in Jersey which was founded in 2007. It manages a range of distinct investment strategies founded on its core competencies: asset allocation, manager selection, fixed interest and credit investing, and equity selection. Funds under management since DPZ’s inception have grown rapidly and, as at 31 March 2014, DPZ had c.£430m of funds, c.£360m of which is managed on a discretionary basis, c.£60m of which is managed on an advisory basis and c.£10m is managed on an execution only basis

Consideration:

Should the full value of DPZ funds under management transfer to BMI, based on their value as at 31 March 2014, the consideration would be, in total, £10.8m (excluding net current assets).

The consideration will be satisfied by an immediate cash payment of £3m together with a payment of New Ordinary Shares in the Group to the value of £2.7m. The number of shares issued will be based on an agreed price of 1706.4 pence per New Ordinary Share. A further payment in cash of £2.4m will be paid in October 2014. These three elements together, totalling £8.1m, represent 75% of the total consideration.

Based on the value of DPZ’s funds under management at 31 March 2016, a cash payment will be made comprising the total consideration due at that date less the upfront consideration already paid.

All of the cash payments will be financed from the Group’s internal resources and the exact number of shares issued by the Group as part of the upfront consideration will be separately announced.

Reasons for and benefits of the acquisition:

The Group’s stated strategy has been to build on the successful integration and growth of its international division, BMI, which was acquired in 2012, with further expansion of the international team and its capabilities, thereby strengthening its offering and accelerating its growth rate. Since acquisition, BMI has grown its funds under management and has increased the size of its team by 15 staff. The acquisition of DPZ is consistent with furthering this growth strategy.

The acquisition will increase the Group’s international presence significantly, with an increase in discretionary funds under management managed out of the Channel Islands of over 50%. In addition, DPZ brings additional skills to the business, which are expected to prove valuable routes to growth. First, the Group intends creating a new Fixed Income offering based on the existing DPZ team who have been very successful in the asset class. Secondly, the Group will create a new Platform Team reflecting the success of DPZ’s International MPS solution enabling this offering to be expanded further.

Chelsea Village HR Head joins RiverPeak
Corporate Finance and M&A/DealsFinance

Chelsea Village HR Head joins RiverPeak


Clare has a wealth of experience including time as Group HR Manager for Chelsea Village PLC. Clare will be adding her expertise to the team as RiverPeak continues its planned growth.

Launched in December, RiverPeak Wealth provides portfolio management, investment analysis and financial planning advice.

James Powell, RiverPeak Managing Director, said, “We are delighted to have Clare join us, she brings with her enormous experience in dealing with the day to day issues surrounding a growing company like ours. Importantly she adds invaluable knowledge in the HR field as we look to add further experienced advisers to our team. We are really looking forward to working with Clare”.

Clare Grout added “I am very excited by the opportunity that RiverPeak Wealth has in financial services and I’m looking forward to supporting the directors’ ambitious growth plans”.

Info Risk Higher for Acquisitions Than Mergers
Corporate Finance and M&A/DealsFinance

Info Risk Higher for Acquisitions Than Mergers

Company acquisitions can have a devastating impact on information security and management, with the employees of acquired firms more preoccupied with the potential impact on their role than with the need to effectively integrate the information of both companies, according to new European research[1] by storage and information management company Iron Mountain. This lack of focus during an acquisition could leave information at increased risk of loss or exposure. The picture is different when companies merge, and employees stay focused on integration and ensuring company information remains well managed.

The top two information concerns of employees at acquired firms are: confusion around responsibilities for managing the information (34%) and the prospect of change to their information management systems (33%). Just over a quarter of employees (27%) at acquired firms worry about consolidating different sets of customer or company records, and less than one in five (17%) worry about how to deal with data discrepancies, duplication and overlap.

This contrasts sharply with the concerns of staff at the acquiring firm, where 41% worry about integrating the two data sets and 34% are concerned about the quality of the data.

Furthermore, one in three employees of acquired firms say there are no policies for integrating records or protecting customer data compared to just 19% of those at the acquiring firm. Paper records are a serious concern, with 44% of newly acquired firms saying there is no process for integrating paper into new digital systems, and 31% saying the same for the storage of the paper archive.

The picture for company mergers is very different, with employees at both firms focused equally on addressing the main aspects of information management. Nearly three quarters (71%) of employees feel supported in record integration during a merger, and nearly two thirds (62%) feel the same about the protection of customer data.

Discussing the findings, Charlotte Marshall, Managing Director of Iron Mountain in the UK, Ireland and Norway said: “Information management is often an afterthought when companies merge. However, given the value of information and the desire of merging firms to rationalise cost structures, it should be a priority. Joining forces with or acquiring another organisation provides an opportunity for firms to re-evaluate their information management programmes and make the changes required to drive consistency, increase security and improve access to information.”

“Our study shows that the emotional impact of acquisitions can cause employees to lose focus on how information is managed. Information on paper is particularly vulnerable, with many firms having no effective storage or integration plans in place, thereby leaving potentially valuable data at increased risk of loss or exposure. Because employees can feel insecure and unsupported during times of change, communication is key. Consistent and clear instruction on how to deal with the information challenges ahead will help employees to understand how information should be managed going forward, where the key responsibilities lie, and what advantages new information management processes can bring.”

Africa’s Growth Set to Reach 5.2% in 2014
FinanceForeign Direct Investment

Africa’s Growth Set to Reach 5.2% in 2014

Economic growth in Sub-Saharan Africa (SSA) continues to rise from 4.7% in 2013 to a forecasted 5.2% in 2014.

Growth was notably buoyant in resource-rich countries, including Sierra Leone and the Democratic Republic of Congo. It remained steady in Cote d’Ivoire, while rebounding in Mali, supported by improved political stability and security. Non-resource-rich countries, particularly Ethiopia and Rwanda, also experienced solid economic growth in 2013.

Capital flows to Sub-Saharan Africa continued to rise, reaching an estimated 5.3% of regional GDP in 2013, significantly above the developing-country average of 3.9%. Net foreign direct investment (FDI) inflows to the region grew 16% to a near-record $43 billion in 2013, boosted by new oil and gas discoveries in many countries including Angola, Mozambique, and Tanzania.

With lower international food and fuel prices, and prudent monetary policy, inflation slowed in the region, growing at an annual rate of 6.3% in 2013, compared with 10.7% a year ago. Some countries, such as Ghana and Malawi, have seen an uptick in inflation because of depreciating currencies. Remittances to the region grew 6.2% to $32 billion in 2013, exceeding the record of $30 billion reached in 2011. These inflows, combined with lower food prices, boosted household real incomes and spending.

Tourism also grew notably in 2013, helping to support the balance of payments of many countries in the region. According to the UN World Tourism Organisation, international tourist arrivals in Sub-Saharan Africa grew by 5.2% in 2013, reaching a record 36 million, up from 34 million in 2012, contributing to government revenue, private incomes
and jobs.

“High-quality university programs in Africa, particularly in areas such as the applied sciences, technology, and engineering, could dramatically increase the region’s competitiveness, productivity and growth,” says Makhtar Diop, the World Bank Group’s Vice President for Africa. “Strategic reforms are needed to expand young people’s access to science-based education at both the country and the regional level, and to ensure that they graduate with cutting-edge knowledge that is relevant and meets the needs of private sector employers.”

Diop further notes that a number of African countries are now routinely among the world’s fastest-growing countries as a result of sound macroeconomic reforms in recent years and the fact that the rest of the world has steadily updated its reality of the continent as a high opportunity region for trade, investment, business, science and technology, and tourism. “Poor physical infrastructure will, however, continue to limit the region’s growth potential. Significantly more infrastructure spending is needed in most countries in the region if they are to achieve a lasting transformation of their economies.”

Africa’s Pulse says that the region’s infrastructure deficit is most acute in energy and roads and that across Africa, unreliable and expensive electricity supply and poor road conditions continue to impose high costs on business and intraregional trade.

Shareholders to Enhance FDN
FinanceInfrastructure and Project Finance

Shareholders to Enhance FDN

Fitch Ratings views the entry of the International Financial Corporation (IFC) and the Corporacion Andina de Fomento (CAF) as shareholders of Financiera de Desarrollo Nacional S.A. (FDN) positively.

With the capitalization of US$120 million (US$70 million from IFC and US$50 million from CAF) these supranationals will have a stake of approximately 30% of FDN. This transaction also strengthens FDN’s capital and will enhance its capacity to mobilize resources to meet the financing requirements of infrastructure projects in Colombia.

Currently, FDN is a fundamental part of Colombia’s infrastructure investment agenda in terms of 4G concessions, energy, transportation, and financing other long-term projects. This capital infusion will help the company face the new challenges derived from the widening if its social objectives and the diversification of portfolio products
(Decree 4174/11).

FDN is developing new credit solutions that will permit the financing of infrastructure projects at all stages of development and will improve the credit risk of these projects. This will facilitate the entrance of private banks and other financing institutions as well as provide more favorable financing conditions.

Fitch continues to monitor FDN’s credit portfolio, balance sheet structure, funding requirements, and credit risk administration and appetite, crucial factors for the sustainability of the entity.

Dubai Islamic Bank partners with Emirates Group
FinanceIslamic Finance

Dubai Islamic Bank partners with Emirates Group

Dubai Islamic Bank (DIB), the largest Islamic Bank in the UAE, has entered into an agreement for an innovative new service with the Emirates Group (Emirates). Through this service, DIB will receive and accept electronic salary certificates of Emirates employees. The Memorandum of Understanding (MoU) was signed between Raju Buddhiraju, Chief of Consumer Banking, DIB and Hussain Shaikh, Vice President – HR Employee Services, the Emirates Group at a ceremony held recently.

The innovative electronic letter solution will significantly streamline the process of applying for personal banking products at DIB by Emirates employees. This environmentally-friendly initiative will resolve the need for DIB to conduct employer verification checks, reducing turnaround time and speeding up the application approval process.

Commenting on the initiative, Raju Buddhiraju, Chief of Consumer Banking, DIB said: “As one of the most innovative banks in the UAE, we have worked to deliver a leading suite of financial services that are designed to help our customers securely and efficiently meet their banking needs. This focus on diversifying our services is an essential component of our growth strategy and as a result, we are delighted to introduce this offering as part of our continually evolving electronic banking platform that will further enhance our ability to better serve our customers.”

The e-letter service will be available to all Emirates employees who apply for DIB’s personal, auto and home finance products.

Appointment at Quilter Cheviot
Corporate Finance and M&A/DealsFinance

Appointment at Quilter Cheviot

Mo Baluchi, previously head of intermediaries at Credit Suisse, has joined the company as Business Development Director.

The appointment follows a year in which Quilter Cheviot’s Jersey office grew its funds under management by 14%. The office also celebrated the 40th anniversary of its presence on the island in 2013.

Office head Tim Childe said: “Mo is a welcome addition to the team here. His appointment is a reflection of our growth during 2013 and our confidence in relation to growth prospects for the future.

“Mo is a highly regarded finance professional who brings with him a wealth of expertise and unrivalled contacts within the intermediary and introducer marketplace.”

Quilter Cheviot CEO Martin Baines described the Jersey office’s 2013 growth as ‘stellar’ and said it had helped the business nationally break the £15bn* barrier for funds under management.

He added: “The growth is testament to the quality of our investment advice and the character of our relationships with clients and professional intermediaries.”

Baluchi will cover business development with intermediaries, introducers and high net worth private clients and will be working alongside Quilter Cheviot’s existing business development executive in Jersey, Chris Scott.

Mo has lived in Jersey for 10 years and in his spare time likes to spend time with his wife and three children. He is also a Director at the Lions Club of Jersey, a Chartered FCSI and a Chartered Wealth Manager.

Quilter Cheviot has an experienced team working across national, international and regional market-places, with significant expertise in dealing with multi-currency solutions.

Mr Childe added that the firm, which operates across 13 locations in the Channel Islands, UK and Ireland, intended to capitalise on its record for consistency and quality of performance.