In this publication, FRP Advisory Restructuring Advisory Partners, Ian Corfield and Phil Armstrong explore the headwinds the leisure sector is facing, and the key factors that leisure businesses will need to keep in mind as they re open their doors.
2022: a year in review
Corporate Finance & Debt Advisory
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Contents
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Foreword
7
A year in review
8
2022 deal stats
9
Debt Advisory
11
Cross-border M&A activity
12
International deals
14
Deal walk through
Scan or click QR code to view our website page 2022: a year in review
16
Case studies
30
National coverage
3
2022 annual review
Foreword A year of two halves
2022 was a year of two halves for M&A activity. At the start of the year, and despite continuing geopolitical and financial headwinds, we saw high levels of business confidence and good availability of capital. Collectively, this helped to maintain robust market sentiment and keep dealmakers busy. But, with the dawn of the second half, came a very different outlook. Heightened political uncertainty, rising inflation, ongoing supply chain issues, skittish capital markets and the escalating cost-of-living crisis all combined to bring instability to lending markets and with it, a much more cautious attitude towards M&A. And as the banks tightened their lending criteria, with many pulling back financing from some sectors completely and reducing lending multiples, this has undoubtedly tempered the confidence of businesses to continue investing for growth through debt funding. Equally, despite the value of the pound falling, cross- border M&A – another good barometer of confidence – also slowed in the second half, with overseas buyers taking a much more cautious view of UK- based opportunities due to the political and economic uncertainty but this was short lived as interest is now recovering with the result of the recent General Election. Sponsor-led M&A, typically driven by private equity investments, responded with more cautious deal structures (less leverage or more deferred consideration) but there are still large sums of unspent capital to invest, alongside a tireless appetite to complete deals.
Private equity has continued to underpin a lot of activity this year and around 75 per cent of transactions completed by our Debt Advisory team in 2022 involved this asset class – an uplift of 10 per cent on 2021. The team, which also expanded in terms of both headcount and geographic coverage this year, successfully raised more than £1.3 billion in total debt facilities across a range of financial structures. This is further proof that debt funding remains an increasingly popular source of capital for transactions with increased structural flexibility, undrawn funding support for capex and buy-and-build strategies, or higher day one leverage representing key requirements. Furthermore, FRP Corporate Finance has enjoyed considerable success in 2022, bringing additional sector knowledge and senior appointments to our service offering. We have been steadfast in continuing to support businesses and private equity investors to navigate the complexities of the unpredictable market conditions, and while deal volumes fell back slightly from 104 to 84 transactions, we have seen a significant increase in the average value of deals completed by our team. Following the opening of our new office in Cambridge, led by Partner Dan Bowtell, the combined strength of our Corporate Finance and Debt Advisory team now stands at 64 fee earners, including 18 partners in 10 offices. And while recessionary clouds look set to intensify as we move into the new year, the outlook for M&A is far from all doom and gloom. Instinctively, it may not feel like the strongest environment to complete deals, but structurally there’s still a lot of capital available. It’s likely that investors will turn their attention towards more inherently resilient industries such as software and tech-enabled services, which typically boast stable levels of recurring revenue, while sectors where people are concerned about exposure to the cost-of-living crisis and diminishing consumer confidence, will incite more caution. We can also expect there to be a return of private equity- backed leveraged buyouts, as investors seek to capitalise on value opportunities in the market. But, ultimately, for well-performing businesses, pricing and interest will hold up because there’s always competition for good assets.
2022: M&A Market backdrop Scan or click QR code to watch video
Clive Hatchard Corporate Finance
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FRP Corporate Finance has enjoyed considerable success in 2022, bringing additional sector knowledge and senior appointments to our service offering. We have been steadfast in continuing to support businesses and private equity investors to navigate the complexities of the unpredictable market conditions.
Clive Hatchard Corporate Finance
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At FRP Corporate Finance, we remain optimistic for the year ahead. While uncertainty in the market will prove a
challenge, our expertise in the mid-market, combined with the strength of appetite from private equity and both international and domestic trade investors, means we continue to expand our pipeline of new opportunities.
Matthew Flower Corporate Finance
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2022 annual review
A year in review Building on success 2022 was another strong year for FRP Corporate Finance. Building on a positive 2021, our team supported businesses through changing market conditions and advised on a greater breadth of exciting and significant mandates. In total our team advised on 84 transactions with an aggregate value of £2.9 billion – a 16 per cent increase on the previous year. In 2022, market trends were initially optimistic and then impacted by changing geopolitical and economic headwinds. In the first half of the year, the positive outlook and economic growth prompted a surge of deal activity. In the third quarter, however, there was a general slowdown as businesses reacted to rising inflation and economic instability driven by UK government policy. However, as advisers, our pipeline remained strong throughout, as we supported mid-market businesses at every stage of the corporate lifecycle. In terms of sector activity, we are broadly in line with the rest of the market - we have seen continued activity in healthcare and pharmaceuticals (34 per cent), technology (21.5 per cent), and business services, and in particular tech-enabled business services (18 per cent). Significant transactions for our team in these sectors included supporting Plenitude
on securing new growth capital; advising on the sale of ProspectSoft to The Access Group; and the management buyout of PHL. In 2022 we also saw good deal activity in industrials and manufacturing (13 per cent), which is perhaps indicative of the types of owner-managed businesses we work with in the mid-market. Standout transactions included the sale of Condale Plastics to Lifco, and Kartell’s acquisition of Summerbridge. In the consumer, retail and leisure sector (10.5 per cent) while there was a clear slowdown in the second half of the year, businesses with strong propositions remained attractive. More than half of the deals we supported involved private equity investment, so appetite and access to capital continues to be strong from this segment of the market. There has certainly been a flight to quality this year, with investors typically more discerning about where they deploy their capital. There has also been a greater focus on driving buy-and-build strategies.
Matthew Flower Corporate Finance
Top 5 sectors
34%
Healthcare & pharmaceuticals
21.5%
Technology
18%
Business services
13%
Industrials & manufacturing
2022: a year in review Scan or click QR code to watch video 7
10.5%
Consumer, retail & leisure
84 Deals closed in 2022 Total number of Corporate Finance and Debt Advisory deals closed in 2022. 1.35 £1.35 billion debt raised The total value of debt raised for clients by our Debt Advisory team in 2022.
2.9 £2.9 billion deal value The aggregate value of Corporate Finance and Debt Advisory deals during 2022.
38 Debt Advisory support Total number of deals with Debt Advisory expertise provided in 2022.
52 52% of deals involve PE The percentage of transactions which involved private equity firms during 2022.
50 50% of
disposals are cross-border The percentage of our disposals that were sold to international acquirers.
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2022 annual review
2022 has been another successful year for our Debt Advisory team. We’ve built on the value and scale of the transactions we support and have raised more than £1.35 billion in total debt facilities across a range of financial structures, mostly focussing on tech financing capabilities leveraged buyouts and asset-based lending (ABL). Our team of 13 has increased in terms of number and geographical scale in the year, and as we go through Q1 2023 we expect to grow the team further. Looking ahead, we anticipate increased demand for financing solutions for high growth tech businesses and ABL funding structures, as businesses look to combat the pressures of the economic cycle. As the year progresses, we also expect greater levels of leveraged buyouts backed by private equity, as investors seek to capitalise on opportunities in the market, following a slight reduction in LBO volume in the final quarter of 2022. Debt Advisory Responding to growing demand
Simon Sherliker Debt Advisory
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Our association with AICA ensures our clients receive the personalised senior partner attention of FRP Corporate Finance, amplified by the expertise, relationships and resources of our global investment banker and adviser network. The benefit to our clients is access to international markets, potential buyers and investors and cross-border intelligence. In 2022 over 50 per cent of our disposals were to international trade buyers.
Simon Davies Corporate Finance
10
2022 annual review
Cross-border M&A activity
Reaching international markets
2022 was a broadly positive year for cross-border M&A activity, and our experience at FRP Corporate Finance operating in the mid-market (deals up to £100 million) reflected this: 2022 saw 50 per cent of our disposals go to overseas buyers, compared with 20 per cent in 2021. Following the challenges posed by the pandemic, we relished the opportunity to pick back up with contacts in major international markets – including those that have had greater interest in the UK since Brexit, such as the US. We were pleased to advise on a host of transatlantic deals including the sale of leading parenting network Lifecycle Marketing (Emma’s Diary) to US-based Everyday Health Group Pregnancy & Parenting (EHG P&P), which saw one of the UK’s most popular pregnancy and parenting platforms become part of EHG P&P’s global network of digital platforms and online communities. Alongside this, we also noticed a marked increase in interest in UK businesses from Scandinavian investors. One of the year’s highlight deals was the sale of BTC Activewear – one of the UK’s largest multi-brand distributors of promotional apparel, corporate wear, workwear, team wear and school wear – to Sweden based New Wave Group. However, it’s worth noting that the upper mid-market of deals worth over £100 million experienced fewer transactions. We attribute the cooling of appetite to
a range of headwinds that manifested themselves throughout the second half of the year, including political uncertainty, rising inflation, ongoing supply chain issues and the escalating cost-of-living crisis, all of which combined to bring a much more cautious attitude towards M&A at the upper end. With these trends set to continue into 2023, all eyes will be on the deals market as an indicator of how UK businesses are weathering the storm. Future trends were a key topic of discussion at the recent European conference for the Alliance of International Corporate Advisers (AICA), which took place in October 2022 in Barcelona. Consisting of a global network of mid- market M&A advisory firms, AICA comprises more than 250 experienced professionals and 41 member firms across 39 countries. After years of lockdown regulations, it was a pleasure to meet up with fellow industry professionals to discuss the sector landscape and take stock of the current market situation. Next year, we are welcoming our fellow AICA members to London for the annual conference, which will see up to 80 corporate finance professionals attend. The network has grown significantly over the past 10 years, and we’re looking forward to continuing to build on this growth in the years to come, and to see this manifest itself in even more cross-border deals.
Simon Davies Corporate Finance
250+
39
68
41
Professionals
Countries
Offices
Member firms
11
2022 annual review
International deals
Corporate Finance Stuga Machinery
Corporate Finance Lifecycle Marketing (Emma’s Diary) Adviser to leading parenting network, Lifecycle Marketing Ltd, on its sale to Everyday Health Group Pregnancy & Parenting.
Corporate Finance Genus Water
Adviser to automated machinery manufacturer Stuga, on its sale to Stürtz.
Adviser to water treatment company Genus Water on its sale to US headquartered Kinetico.
February 2022
January 2022
February 2022
Corporate Finance Abacus
Corporate Finance Corbin & King
Corporate Finance Storagebase
Adviser to Software as a Service (SaaS) provider Abacus Software, on its sale to US firm Naviga.
Adviser on the sale of restaurant group Corbin & King to a subsidiary of Minor International PCL.
Adviser to storage operator Storagebase, on its sale to Storage King.
March 2022
April 2022
April 2022
Corporate Finance Omega Ingredients
Corporate Finance Fullwood Milking
Corporate Finance Avania
Adviser to food flavouring and extract manufacturer Omega Ingredients, on its sale to Robertet Group.
Adviser to international investment company Pindustry, on its sale of Fullwood Milking to Dutch group, JOZ.
Adviser to Management on the secondary buyout of Avania by Astorg Partners from Kester Capital. June 2022
April 2022
June 2022
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2022 annual review
Corporate Finance Triton Exec
Corporate Finance Humble Group
Corporate Finance Trinity Property Group
Adviser to global executive search firm TritonExec, on their investment from Prytek.
Financial due diligence adviser on the acquisition of Amber House Ltd by Swedish FMCG powerhouse, Humble Group.
Adviser to residential property management agent Trinity Property Group, on its sale to Odevo.
September 2022
September 2022
July 2022
Corporate Finance Blueback Global
Corporate Finance Condale Plastics
Corporate Finance BTC Activewear
Adviser to global expansion leader Blueback Global, on its sale to TopSource Worldwide.
Adviser to Plastic manufacturer Condale Plastics, on its sale to Swedish group Lifco.
Adviser to multi brand distributor of promotional apparel and corporate wear BTC activewear, on its sale to New Wave Group AB.
October 2022
October 2022
October 2022
Corporate Finance Hybrid Theory
Corporate Finance Cellesce
Corporate Finance SF Limited (SFL)
Adviser to digital media agency, Hybrid Theory, on its sale to Azerion Group.
Adviser to biotechnology firm Cellesce, on its sale to Molecular Devices.
Adviser to Stamm International Corporation (SIC) on the sale
of its subsidiary company SFL to Sphearing Group.
November 2022
November 2022
December 2022
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2022 annual review
Deal walk through
JAN 22
Industrials & manufacturing Kartell Adviser to Kartell UK on acquisition of furniture manufacturer Summerbridge.
Business services Storagebase Adviser to storage operator Storagebase
on its sale to Storage King.
Technology ProspectSoft Adviser to SaaS provider ProspectSoft and Maven Capital Partners on its sale to The Access Group.
Healthcare Partnering Health Ltd Adviser to healthcare provider PHL on management buyout.
DEC 22
Media Digital Sports Mgmt Adviser to leading eSports agency, Digital Sports Mgmt, on its merger with YMU Sports.
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Pharmaceuticals AURELIUS Adviser to asset management group AURELIUS on its acquisition of the healthcare group McKesson UK.
Technology Babble
Adviser to babble, a ‘cloud-first’ b2b communications service provider, and Graphite Capital on the refinancing of the business.
Distribution BTC Activewear Adviser to BTC Activewear on its
Industrials & manufacturing Condale Plastics Adviser to Plastic manufacturer Condale Plastics on its sale to Swedish group Lifco.
sale to New Wave Group.
2022: deal walk through Scan or click QR code to watch video
15
M&A Advisory – selling a business
Lifecycle Marketing
FRP Corporate Finance advised on the sale of parenting specialist, Lifecycle Marketing, to US-based Everyday Health Group Pregnancy & Parenting. Background Founded in 1991, Lifecycle Marketing Ltd is a leading parenting network and owner of popular UK pregnancy and parenting brand Emma’s Diary, a market-leading channel in the UK mother and baby sector, which provides pregnant women and new parents with information and support from pregnancy to birth and beyond. The company’s multi-channel digital resources, including a highly rated parenting app, reach more than 90 per cent of expectant parents in the UK. Action Lifecycle appointed FRP Corporate Finance to advise on strategic options including a full or partial sale of the business. We produced the marketing collateral and shortlisted a number of parties to approach which included Everyday Health, part of the NASDAQ listed Ziff Davis group. As part of the transaction, in addition to Emma’s Diary, other popular Lifecycle Marketing brands including Families and Health Professional Academy also moved across to form part of the EHG P&P portfolio. Outcome The successful sale is one of six transactions completed by our Corporate Finance team in the digital marketing sector. The deal represents the start of an exciting new era for Lifecycle Marketing’s ever popular digital platforms. Nick Watts, Managing Director of Lifecycle Marketing, said the company was “delighted” to become part of the EHG P&P family, with the prospect of realising significant synergies between the two companies, and also praised the work of the FRP team.
Simon Davies Partner Corporate Finance London West End, Reading +44 (0)7850 337 222 simon.davies@frpadvisory.com
Bilal Hasan Director Corporate Finance London West End, Reading +44 (0)7800 682 884 bilal.hasan@frpadvisory.com
Not only did FRP find us the right partner, they expertly guided us through the process, helping us to navigate through any issues that arose along the way. Nick Watts Lifecycle Marketing
16
M&A Advisory – buying a business
Twenty7Tec Group
FRP Corporate Finance advised mortgage tech specialists Twenty7Tec on its acquisition of Bluecoat Software. Background The Twenty7Tec group, headquartered in Bournemouth has built an enviable reputation in the mortgage market for developing technology that enables advisers to serve their clients in a simpler, faster and more efficient manner. The company was looking to expand its operation by acquiring Bluecoat Software, which provides its mortgage, protection and wealth management CRM solution ‘Finplan’ to more than 300 advisory firms. Twenty7Tec appointed FRP as lead advisers on the deal. Action FRP Corporate Finance’s team advised Twenty7Tec’s management throughout the transaction process – the first significant acquisition by the company. As well as its extensive experience, the team was able to draw on its strong local presence and understanding and knowledge of mid-market software transactions to successfully complete the deal, which will see the businesses merge to operate under the Twenty7Tec brand. The combined business, which operates with close to 100 employees, will be led by CEO James Tucker with former CEO of Bluecoat Software, Mark Skelding, joining the board of Twenty7Tec Group as a Non-Executive Director. Outcome Following the successful acquisition, Twenty7Tec will pursue both organic and acquisitive growth, fuelled by ongoing investment in new tech-enabled services. The company plans to invest heavily in developing Finplan into a market-leading CRM solution for the wealth, mortgage and protection markets, as well as continuing to further develop the other mortgage capabilities of the combined businesses.
The FRP Corporate Finance team have been exceptional partners during the process: their focus, diligence and determination to do everything they could to support us in our ambitions stood out right from the start.
James Tucker Twenty7Tec Group
Clive Hatchard Partner Corporate Finance London West End, Reading +44 (0)7850 337 223 clive.hatchard@frpadvisory.com
Richard Boyden Director Corporate Finance London West End, Reading +44 (0)118 902 7105 richard.boyden@frpadvisory.com
Chris King Senior Manager
Corporate Finance London West End +44 (0)20 3941 5922 chris.king@frpadvisory.com
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M&A Advisory – management advisory
Prism Healthcare
I would like to thank Gary and the team at FRP Corporate Finance for their support on such a landmark deal – we’re excited to embark on a new chapter for Prism Healthcare, whilst continuing to support our customers and their clients in homecare, long term care and the paediatric market by making care easier.
FRP Corporate Finance advised Prism Healthcare’s management team on strategic sale. Background Headquartered in Wakefield, Prism Healthcare manufactures and supplies a broad range of products and services to health and care providers across the UK, and internationally through a network of distributors. The company employs more than 650 people, and its portfolio includes safe patient handling, bathing, accessibility, and pressure area care products. Over the last three years, Prism has consolidated its position as a market leader, with four acquisitions enabling it to double in size. FRP Corporate Finance was appointed to advise the management team when existing investor Limerston made the decision to sell. Action FRP Corporate Finance’s team advised Prism’s five-strong management team on a deal that saw Charme Capital Partners become the business’ majority investor, supported by Prism’s existing investor, Limerston Capital. The management team retains a stake in the business as part of the deal and will continue to lead the day-to-day running of the company. Outcome With the support and investment of Charme Capital Partners, Prism will now drive further organic expansion through the continued development of its offering and further investment in its IT and manufacturing capabilities. It will also continue to explore complementary acquisitions to drive growth both in the UK and internationally. Commenting on the deal, FRP Corporate Finance Director Gary Hyem said: “I’ve worked closely with Prism Healthcare and the management team for over 15 years, and it has been great to support them on such a huge growth journey. I’m looking forward to seeing where the company goes next as it continues to drive expansion both at home and overseas.”
Paul Morton Prism Healthcare
Gary Hyem Director Corporate Finance Birmingham +44(0)7787 151 727 gary.hyem@frpadvisory.com
18
M&A Advisory / Debt Advisory – selling a business
Partnering Health Ltd
FRP Corporate Finance, Debt Advisory and Pensions Advisory teams support PHL’s successful management buyout to expand delivery of care services across the UK. Background Partnering Health Limited (PHL), founded in 2009 and based in Hampshire, provides a range of healthcare services to the NHS and private healthcare partners across the UK. This includes running Integrated Urgent Care, which provides telephone triage services and out-of-hours home visiting services to 1.7 million patients across Hampshire; custody healthcare services for Hampshire Constabulary and the City of London Police; delivering remote patient monitoring systems; and advising GP practices on the commercial aspects of their businesses. The management were looking to buy out the business to support future growth through acquisition and expand existing contracts, and appointed FRP Corporate Finance as advisers. Action Having worked with PHL in the past, FRP Corporate Finance’s team was well positioned to advise the company’s shareholders on the management buyout (MBO) terms, while the Debt Advisory team was also able to support PHL’s management to identify and secure the best available finance package to complete the acquisition. The FRP national Pensions advisory team advised PHL’s management on a pension structure for PHL’s shareholders. Outcome The MBO transaction was successfully completed with a finance package secured from lenders ThinCats to support the acquisition. By combining high-quality clinical services and governance with technological innovation, the deal will enable PHL to expand its delivery of care across the UK. Ross Brand, CEO at PHL Group, described FRP’s support on the deal as “invaluable”.
Their experience in the healthcare and technology sectors and market expertise has helped us secure the perfect future for PHL, the seamless integration between all of their teams, Corporate Finance to Debt Advisory and Pensions made the whole process smooth sailing.
Ross Brand PHL Group
Clive Hatchard Partner Corporate Finance London West End, Reading +44 (0)7850 337 223 clive.hatchard@frpadvisory.com
Ian Milne Partner Debt Advisory London West End, Reading +44 (0)7584 706 694 ian.milne@frpadvisory.com
Madhavi Morjaria Manager Corporate Finance Reading +44(0)7872 841 103 madhavi.morjaria@frpadvisory.com
19
M&A Advisory – selling a business Debt Advisory – refinancing / acquisition finance and growth finance
Blueback Global
FRP advised California-based business expansion specialists Blueback Global on its sale to TopSource Worldwide. Background California-based Blueback Global is a leader in global expansion services, helping businesses that are expanding internationally to employ the talent they need quickly, easily and compliantly. The company supports businesses of all sizes to recruit in more than 180 countries covering 24 time zones, and has offices strategically located in the US, UK, Hong Kong, Japan, Mexico, Singapore and Nicaragua. The company was looking for new owners to enable it to realise its growth potential, and appointed FRP as advisers on the transaction. Action FRP Corporate Finance’s team acted as lead sell-side advisers, supporting Blueback Global’s shareholders in negotiating the terms of the transaction and project managing the deal to completion. Horizon Capital backed business, TopSource Worldwide, an employer services, payroll and employer of record service provider, was chosen as the preferred bidder for Blueback Global. FRP’s Debt Advisory team was retained by TopSource Worldwide to advise the company and Horizon Capital on refinancing the group including raising debt to help support the acquisition. Outcome The deal will see Blueback Global, and its founder Arden Ng, join TopSource Worldwide and continue to provide employer of record, entity set-up, entity management, multi-country payroll and global HR solutions to customers worldwide. It provides a transformational opportunity for the enlarged, combined business to take the lead in services to clients seeking to expand to markets around the world, and creates a business with 1,600 clients being served across more than 90 markets worldwide.
Our core focus is always our clients, partnering with them to hire, set up, and operate anywhere, globally. We look for the same client focus, first rate expertise and dedication from our advisers and are delighted with how FRP Corporate Finance delivered. Our whole team is excited by the possibilities that will come with this combination. Arden Ng Blueback Global
Mark Naughton Partner Corporate Finance Bristol +44(0)7977 465 589 mark.naughton@frpadvisory.com
Alex Sargeant Director Corporate Finance Bristol +44(0)7887 513 645 alex.sargeant@frpadvisory.com
Simon Sherliker Partner Debt Advisory London West End, Reading +44 (0)7464 481 266 simon.sherliker@frpadvisory.com
20
M&A Advisory - buying a business
Kartell
FRP Corporate Finance advised Kartell UK on acquisition of furniture manufacturer. Background Kartell UK is one of the UK’s largest and fastest-growing suppliers of heating and bathroom products to the independent showroom sector, with an annual group turnover of more than £100 million. The company was looking to secure its supply of bathroom furniture through the acquisition of cabinet manufacturer Summerbridge. Headquartered in East Yorkshire, Summerbridge is one of the UK’s leading manufacturers of kitchen and bathroom cabinets and doors, supplying to manufacturers, contractors, developers and distributors. Kartell engaged FRP to advise them on securing the acquisition. Action FRP Corporate Finance’s team approached the owners of Summerbridge off-market to initiate discussions about a possible acquisition. Once it was clear that there was potential for a deal, the team provided full buy-side support, including target appraisal, site visits, indicative valuation, offer structuring, and negotiating commercial terms. The team project-managed the deal and all buy-side workstreams, from initial contact with the target business through to completion of the share purchase agreement. Outcome The acquisition of Summerbridge represents the next chapter in Kartell’s story, with the group securing a supply of high-quality, British made bathroom cabinets for its customers, and Summerbridge benefiting from investment by the group, while retaining operational autonomy. This was the fourth deal delivered by FRP Corporate Finance‘s team for Kartell in three years, underlining the team’s ability to unlock off-market deals within the sector through extensive contacts and knowledge of the industry, as well as their skills in negotiating and project-managing transactions.
Harry Walker Partner Corporate Finance East Midlands +44(0)7519 107 751 harry.walker@frpadvisory.com
In common with many in our industry over the last eighteen months we have experienced record levels of demand. It is with great pleasure that we are supporting the future of another fantastic British manufacturer. We were keen to be invested in a city which is clearly making giant strides in the UK economy.
Daniel Choucino Manager Corporate Finance East Midlands +44(0)7706 285 871 daniel.choucino@frpadvisory.com
Alex Norford Kartell
21
M&A Advisory / Debt Advisory – buying a business
Stonbury Holdings
FRP Corporate Finance advises mid-market private equity investor LDC on its investment in sustainability specialist Stonbury. Background Headquartered in Bedfordshire, Stonbury Holdings has a 40-year heritage of working with UK water companies and environment agencies to provide low-carbon services to maintain, repair and refurbish their critical assets, from drinking water provision to wastewater treatment, helping to protect supplies and extend asset lives. The national company employs about 300 people across 11 locations in the UK. FRP was approached to support private equity firm LDC after they had secured preferred bidder status in a competitive auction process run by the sellers. It recorded revenues of £44.7 million in the year to June 2022. Action FRP Corporate Finance were approached to provide buyside advice and debt advisory services to LDC. The FRP teams’ advice encompassed valuation analysis, market mapping for acquisitions, detailed financial modelling and exit analysis. The debt team ran a competitive debt process sourcing multiple offers of finance for the deal with differing structures and attributes. Ultimately there were several lenders, but the FRP team negotiated an improved package with one of the lenders which resulted in that party being given exclusivity. Outcome LDC obtained a very competitive debt package to support the acquisition of Stonbury against a backdrop of rising interest rates and uncertainty in the markets. The other analysis and support FRP provided allowed the debt to progress smoothly and ultimately to a successful conclusion.
Sustainability sits at the heart of the challenge water companies and environmental organisations are facing. Creating a more resilient and efficient water network and a healthier, safer environment will be vital to reduce the impact of significant weather events. Stonbury is well- equipped to support our clients with low-carbon and nature-based solutions.
Trevor Hoyle Stonbury Holdings
Dan Bowtell Partner Corporate Finance Cambridge +44 (0)7979 536 343 dan.bowtell@frpadvisory.com
Tom Cox Partner Debt Advisory
London West End +44(0)7916 252 101 tom.cox@frpadvisory.com
22
M&A Advisory - selling a business
Abacus
FRP Corporate Finance advises Software as a Service (SaaS) provider Abacus Software on its sale to US firm Naviga. Background Operating from offices in London and Portsmouth, Abacus’ SaaS offering provides a unique proprietary Customer Data Platform (CDP) and Digital Experience Platform (DXP). In 2013, private equity investor BGF backed Abacus, and has since provided close to £4 million of growth capital, enabling the business to increase its sales and marketing activity, accelerate product development and expand into new markets including B2C publishing, professional institutions, and events. Action BGF appointed FRP Corporate Finance to lead the sales process and find a suitable buyer for Abacus and its 50-strong team. Recognising the opportunity for Abacus to catch the attention of strategic international players. the FRP team created a compelling value proposition highlighting technical capabilities, growth opportunities and attractive financial characteristics to demonstrate its future growth trajectory to overseas buyers. Outcome The sale generated significant interest from overseas acquirers, seeking high value niche platforms that solve a problem in a specific vertical and can be integrated as a new solution alongside an established service. Terms were agreed with Minnesota- based Naviga – a leading provider of software and services powering media-rich industries, with 3,000+ clients including Apple TV, Disney, The Telegraph and Sky across 45 countries. The transaction provided Abacus with the opportunity to join a premier global organisation to help accelerate the innovation and value it provides to its customers, whilst providing Naviga with the opportunity to expand their footprint across Europe. The combined business is now better placed to provide Naviga’s growing global customer base with opportunities to grow engagement and revenue with personalised digital experiences and offers.
James Mines Partner Corporate Finance London West End, Reading +44 (0)7876 541 840 james.mines@frpadvisory.com
It has been a pleasure working with FRP Corporate Finance. They have built a strong relationship with the different stakeholders in the transaction and worked tirelessly to the end to complete the deal.
Ben Lowe Senior Manager
Corporate Finance London West End +44 (0)7425 286 455 ben.lowe@frpadvisory.com
William Gresty BGF
23
M&A Advisory – selling a business
BTC Activewear
FRP Corporate Finance advises BTC Activewear Limited, a multi-brand distributor of promotional, corporate, school and work wear on the sale to New Wave Group AB. Background Established in 1990, BTC activewear is one of the largest UK- based multi-brand distributors of promotional, corporate, school and work wear. With over 50 leading international apparel brands in its portfolio, the company generated revenue of £53m in 2021 and EBIT of £4.1 million. BTC was majority owned by Falk&Ross Group Equity GmbH, Europe’s leading logistics wholesaler of branded apparel, itself a portfolio company of Borromin Capital Management GmbH, the independent partner- owned private equity advisory firm based in Frankfurt. BTC is led by a highly experienced and ambitious team with their best- in-class customer service, excellent stock availability and short lead times. Action FRP Corporate Finance were engaged to manage the sale of the business and generate interest from potential buyers. The company gained attention from a number of interested parties, and the team were successful in securing several offers, prior to entering into exclusivity with New Wave Group. The deal presented many challenges and required a huge amount of commitment, diligence and expertise from both sell-side and buy-side teams to deliver a positive outcome. Outcome The successful transaction will enable BTC to grow its position in the UK market, benefitting from a more comprehensive and improved customer offer and New Waves Group’s invaluable experience, portfolio of brands and financial strength. The sale represented an excellent financial outcome for Falk&Ross and Borromin.
Darren and his team at FRP showed great diligence and perseverance on this deal, herding several different interested parties toward a common goal and I very much appreciate Darren’s help and advice to me personally.
Stephen Pope BTC Activewear
Darren Miller Partner Corporate Finance Reading +44 (0)7860 215 865 darren.miller@frpadvisory.com
Richard Boyden Director Corporate Finance London West End, Reading +44(0)7876 834 132 richard.boyden@frpadvisory.com
Madhavi Morjaria Manager Corporate Finance Reading +44(0)7872 841 103 madhavi.morjaria@frpadvisory.com
24
M&A Advisory - selling a business
Condale Plastics
Adviser to Plastic manufacturer Condale Plastics on its sale to Swedish group Lifco. Background Based in West Sussex, Condale Plastics was established in 1969, and is a specialist manufacturer of bespoke plastic extrusions. They manufacture high-quality rigid plastic profiles and tubes, flexible plastic profiles and tubes and plastic co and tri extrusions. The extrusion operation includes a complete in-house tool production and maintenance service. Condale Plastics’ extensive experience in plastic extrusion manufacturing, commitment to quality and outstanding customer care has awarded them many repeat contracts and recommendations. Action Condale Plastics appointed FRP Corporate Finance to support the transaction because of the team’s expertise, bandwidth and the ability to assist large privately owned companies with their exit process. The FRP team secured a buyer for the £18 million turnover business. It was important to find a buyer for the right price and the right terms for the founding directors, and Lifco was the ultimate buyer who ticked all the boxes. Outcome Although Condale Plastic have been successful for over 50 years, the transaction enabled Lifco to facilitate further capital investment and a growth in sales. The firm will continue to operate from its 6,000 sq.m manufacturing facility, which features 33 extrusion lines including a separate unit for the production of medical grade extrusions. Condale’s strong team of 80 will continue to support its diverse range of customers in sectors ranging from retail and horticulture to construction and transport.
Adrian Alexander Partner Corporate Finance Brighton +44(0)7889 412 631 adrian.alexander@frpadvisory.com
Selling a home-grown business will always be a difficult decision but FRP Corporate Finance ensured we found a suitable buyer and delivered a seamless transaction.
Nick Lovelock Senior Manager Corporate Finance Brighton +44(0)7585 903 640 nick.lovelock@frpadvisory.com
David Dalton Condale Plastics
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Debt Advisory – asset based lending
AURELIUS Group
We are delighted to partner with FRP and have structured tailor-made financing to support the company’s transition after the carve-out. AURELIUS worked with FRP and the syndicate lenders on a financing solution adapted to current market conditions, allowing the company to focus on implementing its business plan. Richard Schulze-Muth AURELIUS
FRP Corporate Finance advised pan-European asset management group AURELIUS on its acquisition of the healthcare group McKesson UK. Background AURELIUS is a pan-European investment group focused on improving the operational performance of companies by providing management capabilities and financial resources for investing in products, sales and R&D. Operating from offices in Germany and the UK, AURELIUS has a track record of successful investment in more than 100 businesses across a range of geographies, industries and sectors. The company was looking to acquire McKesson UK, the owner of several market leading pharmaceutical businesses including the LloydsPharmacy chain and AAH Pharmaceuticals, and engaged FRP Corporate Finance to assist in a debt raising process. AURELIUS, to assist in arranging and negotiating one of the largest syndicated asset-based lending (ABL) transactions in the UK in recent years. The Debt Advisory team secured a £357.5 million ABL facility provided by a syndicate of six lenders (led by Barclays) to fund the acquisition, which saw McKesson UK separated from its former US-based parent company, McKesson Corporation, in a process that ran for several months. Action FRP Corporate Finance was appointed as debt adviser to Outcome The successful landmark deal represented AURELIUS’ biggest acquisition since it was founded in 2006; McKesson UK is a £5.7 billion turnover business with more than 18,000 staff across its retail, digital, homecare and wholesale divisions. The deal will see McKesson UK benefit from new opportunities as a standalone business, underpinned by its strong retail brand, loyal customer base and leading commercial footprint across wholesale pharmaceuticals. The transaction is the biggest ABL deal that FRP Corporate Finance has supported to date; globally there are only a handful of deals of this scale each year, reinforcing the firm’s position as the pre-eminent ABL adviser in the UK.
Dave Edwards Partner Debt Advisory London +44(0)7775 674 342 dave.edwards@frpadvisory.com
Andrew Dimmock Partner Debt Advisory London +44(0)7739 819 559 andy.dimmock@frpadvisory.com
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Debt Advisory – management & leveraged buyout financing
Nourish Care Systems
FRP Corporate Finance secures the finance package for Livingbridge’s investment in healthcare software specialist Nourish. Background Founded in 2011, Bournemouth-based Nourish Care Systems is the leading provider of digital care planning software to the UK health and social care markets. The business, which uses cloud technology and data insights to help carers optimise care outcomes, has grown rapidly in recent years, and services more than 300 care providers across 1,800 UK settings. Livingbridge, one of the UK’s leading mid-market private equity investors, was looking to invest in Nourish, and appointed FRP Corporate Finance to secure a finance package to support the deal. Action FRP Corporate Finance’s Debt Advisory team has a wealth of experience and extensive knowledge of debt financing and mergers and acquisitions. The team was able to identify and secure the best available annual recurring revenue (ARR) debt structuring to support Livingbridge’s investment in Nourish, which is underpinned by the PE company’s two decades of experience in the social care, health care and software sectors. Outcome The successful transaction – the fourth time FRP Corporate Finance’s team had supported Livingbridge within a year – has resulted in a partnership that closely aligns the values of the two businesses. Nourish can now further develop its best-in- class platform, continue to innovate in its use of data to improve care outcomes, and broaden the number of care settings it can support.
It’s been great to work with the FRP Corporate Finance’s Debt Advisory team once again. They are highly experienced and knowledgeable, and their knowledge of ARR debt structuring combined with mid-market M&A deal execution has helped us make this partnership possible.
Sanjay Panchal Livingbridge
Simon Sherliker Partner Debt Advisory London West End, Reading +44 (0)7464 481 266 simon.sherliker@frpadvisory.com
Stuart Sweeney Director Debt Advisory
Karris Giani Manager Debt Advisory
London West End +44(0)7780 300 882 stuart.sweeney@frpadvisory.com
London West End +44(0)7517 908 030 karris.giani@frpadvisory.com
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Transaction services – employee ownership trusts
SSQ
FRP were a delight to deal with, delivered outstanding and succinct advice and added immeasurable value to our Board’s deliberations. Their recommendations following a review of our strategic options have culminated in the right outcome for our employee colleagues, SSQ’s ongoing management team and our selling shareholders.
FRP Corporate Finance advised shareholders of SSQ on the sale of the business, which will now operate as an Employee Ownership Trust. Background Global Law Talent, trading as SSQ, is an international group of companies providing leading legal search and recruitment consultancy services, through eight subsidiaries operating from 11 offices located across Europe, Asia, Africa and the Middle East. Founded in 2003, the London-headquartered group works with law firms and leading brands within commerce, industry and financial services. SSQ placed third in the Recruiter Hot 100 Companies 2021 index, and is the most consistent recruiter in the top echelons of the index over the past decade. Following a restructure, the shareholders wanted to explore their options for the business, and instructed FRP Corporate Finance as lead advisers. Action FRP Corporate Finance’s team worked with the SSQ executive management to explore all the available options. Having reviewed and considered the various possibilities, it was clear that implementing an Employee Ownership Trust (EOT) would deliver the desired outcome for shareholders. It would also provide stability and a platform for continued growth for the company, and enable its c.90 employees to share in the potential financial rewards that an EOT structure facilitates and promotes. Outcome The FRP Corporate Finance team carried out a strategic review before designing the deal structure, creating a comprehensive financial model, drafting the Heads of Terms, and preparing a detailed share valuation for the directors and the Trustees of the EOT. The successful transaction provided an important milestone for the future of SSQ, creating an opportunity for continued growth and success of the business under a new ownership model.
Jonathan Field SSQ
Dave Howes Partner Corporate Finance Norwich +44 (0)7500 858 143 dave.howes@frpadvisory.com
James Cooper Director Corporate Finance Norwich +44 (0)7717 570 973 james.cooper@frpadvisory.com
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Transaction services – financial due diligence
Encore Group
FRP Corporate Finance advised Encore Property Management Group on the acquisition of Preim Ltd. Background Based in Cambridge, Encore Property Management Group is an award-winning residential managing agent, providing a range of estate management services to more than 27,000 properties across the UK. FRP Corporate Finance’s team advised Encore on a management buyout (MBO) of the business, backed by Queen’s Park Equity (QPE), in 2021. When the company identified Peterborough-based residential managing agent PREIM as a potential acquisition target, it once again engaged FRP. Action FRP Corporate Finance was appointed to carry out financial due diligence on PREIM – being Encore’s first acquisition since the QPE investment – as part of the company’s long-term buy and build strategy. PREIM’s expertise in working with housing developers across England, its reputation for quality and its differentiated focus on residential community engagement made it a highly attractive asset and natural fit with Encore. Outcome The successful acquisition of PREIM has boosted Encore’s portfolio of residential properties by 16,000. The deal is both a strategic and cultural fit, with the PREIM leadership team being Encore alumni.
PREIM has a fantastic reputation and track record with long-standing client partnerships. The business is a great strategic and cultural fit, with the PREIM leadership team being
Encore alumni. Joaquim Fillola Encore Group
Chris Adlam Partner Corporate Finance Norwich +44 (0)7786 166 927 chris.adlam@frpadvisory.com
Matt Field Director Corporate Finance Norwich +44 (0)7796 716 078 matt.field@frpadvisory.com
Joanne Price Associate Director Corporate Finance Norwich +44 (0)7841 494 357 joanne.price@frpadvisory.com
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2022 annual review
National coverage
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