May 2020: ROCKWORTH ADVISES MARTINDALE GROUP ON SALE TO THE YESHI GROUP

The Martindale Group has over 140 years’ experience in producing and marketing hand tools that are used in agriculture, hardware, construction, and horticulture.

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Martindale and Chillington “Crocodile” brand tools have been, and still are, recognized throughout the world as the benchmark for quality by generations of farmers and general users. With companies based in the United Kingdom, Asia, and West Africa, the Group is strategically placed to serve all parts of the world and ensure that the “Crocodile” brand will continue to deliver superior product quality over a wide range of hand tools, and satisfy current as well as future market needs. 

Rockworth, led by Lawrence Price, was delighted to act for the company and its shareholders in its sale to the Yeshi Group, an industrial conglomerate comprising 10 companies spread across 8 African countries, managing to complete a lengthy and complex process due to the international nature of both companies on 29 May 2020.

06 Feb 2020: WHAT TO EXPECT FROM SPANISH PRIVATE EQUITY IN 2020

In general, low interest rates will continue to spur the growth of the Private Equity sector in Spain, despite the climate of possible deceleration with which the year has begun.

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We will continue to witness a greater penetration of Private Equity throughout the manufacturing framework, with another potential record of money attracted, and also new fiscal measures aimed definitively at boosting the development of the industry, such as those in the Basque Country. Thus, in 2020, several Private Equity Houses will once again close funds with several hundred million euros as "ammunition" for new projects.

 

In addition to the above, other trends in the Spanish landscape should be highlighted, trends that do not exclusively affect Private Equity, but are related to the current situation of extraordinary liquidity in the markets:

  • The growing number of debt funds, with a variety of approaches, in search of a % of the "banked" market of business financing.
  • New PE Houses entering the market, with funds below €100M designed to operate in the "lower middle-market", a market niche traditionally least attended by the sector, and in which, in recent years, we have increasingly witnessed interest from European Private Equity.
  • A greater role of Family Offices, choosing to make more and more direct investment, also in the lower middle-market.
  • The (still token) entry of search funds, with its original formula sometimes “distorted”, but with a growing number of operations on the market.

 

Post by Baum.

08 Jan 2020: THE IMPORTANCE OF THE SHAREHOLDERS AGREEMENT

We believe that the Shareholders Agreement is an essential and necessary tool for all the companies that have several shareholders. This private document becomes of more relevance ...

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... in the case that the commitment of the partners to the day-to-day running of the company is asymmetrical, as may be the case with a financing shareholder.

The aim of the Shareholders´ Agreement is in its core to regulate the relations between the shareholders, and between the shareholders and the company.

 

A Shareholders Agreement normally establishes certain counterweights, for example by means of vetoes or qualified majorities, in order to limit or to impede the undertaking of certain actions carried out by one or more partners, and all this, with the aim of guaranteeing that these actions are known by all the shareholders, that they are accepted by the shareholders that add up to at least a certain percentage of the share capital, or even to guarantee the acceptance of this referred potential actions by a specific partner.

 

Similarly, the Shareholders Agreement must guarantee the possibility for the management team to carry out the day-to-day administration of the company without being in need to ask the shareholders to accept its decisions.

In short, although it may seem that all Shareholders' Agreements are the same, in order to execute it correctly it is necessary to carefully analyse the company, its stage of development and the profile of its shareholders, to be able to establish a Shareholder´s Agreement that may guarantee an optimal equilibrium between the shareholders themselves and also between the ownership and the daily management of the company.

 

Posted by BAUM

23 Dez 2019: ICFN-MEMBER ELIT CAPITAL IS M&A SPECIALIST OF THE YEAR 2019 (BRAZIL)

ICFN-Member Elit Capital has been recognized as "M&A Specialist of the Year 2019" (Brazil): Daniel Rivera Alves & "Best Capital Transformation Advisory Firm 2019" (Brazil), at the M&A Awards 2019 by Acquisition International Magazine.

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Quote from the Award Annoucement: "Elit Capital is a prominent M&A Advisory firm, specialized in supporting its clients in financial strategies and value management solutions. With offices in São Paulo and Miami, Elit Capital provide full Corporate Transaction Services to middle market companies in Brazil, and for American looking for investment opportunities in Brazil."

 

Post by. D. Rivera

11 Sep 2019: EUROPEAN M&A ACTIVITY FOR THE 2Q 2019

According to Pitchbook´s 2019 2Q report, European M&A activity continued to slightly decline in 2Q 2019, in line with the trend since 2016. 

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No significant deals were closed in the quarter, but the good news is that a selection of upcoming mega deals creates cause for optimism.

 

The DACH region fell the most, with a 57,8% quarter on quarter drop. Central and eastern Europe M&A activity rallied somewhat, increasing 47,3% QoQ, and the UK & Ireland despite the Brexit, contributed with the highest proportion of deal value (37,7% QoQ).

 

A study of Baker McKenzie reveals that in the Spanish scenario, M&A activity in this period shows fewer operations than the previous one (272 vs. 295) but of a higher volume ($5.490 mm vs. $3.984 mm). The characteristic of the period is an increase in domestic operations (in value, although not in number), a phenomenon that is repeated in international operations carried out by Spanish companies over foreign ones (increase in value, although not in number), in contrast to the strong general decrease in international operations of foreign companies over Spanish ones.

 

There is optimism for the second half of the year, thanks to the prominence acquired by Private Equity funds, the appetite for quality assets in the market and the low cost of financial leverage.

 

The most active sectors in M&A operations in Spain were energy, media, entertainment industry and retail, being the most significant operation The Carlyle Group's acquisition of a 30-40% of CEPSA.

 

And, back to Europe, the diminishing quantity of corporate M&A deals has continued. There is also a growing intent from Japan-based companies to establish themselves in Europe. And, in this cross-border line, protectionist policies could unfortunately interfere with future inward investment from outside the EU.

 

Post by BAUM.

27 Aug 2019: HOW TO PREPARE FOR DIFFICULT NEGOTIATIONS

Many people believe that negotiations are above all a competition between two clever and quick-witted people and concentrate their attention on the concrete act of negotiation, i.e. the interaction between the actors.

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Experienced negotiators, on the other hand, know that a large part of the success of the negotiations is decided before the start of the concrete talks. Here a few elements that are essential for the good preparation of a negotiation:

 

The most important thing is to have alternatives to a deal. You need what the Anglo-Saxons call "walk-away power", the ability to walk away from a bad deal and not make it. Work hard before the start of the negotiation to have alternatives, i.e. different ways of closing a deal or the possibility of not closing a deal at all.

 

Another part of the preparation is the analysis of the balance of power between the negotiating parties. In many negotiations the forces are not equally distributed, but one party has one or more advantages.The main factors influencing the balance of power between the parties are the need to close the deal, the emotional desire (both cause lack of walk-away power), competition and the time factor. Analyze your own position against these four factors and form hypotheses about the other side's position against these four factors to use this knowledge in the negotiation to your advantage.

 

What information about the other side do you need to find out in order to increase or consolidate your bargaining power? How will you do that? What information about you should the other side not find out so that you do not reduce your bargaining power? How will you protect this information without lying, which is not only unethical, but can also have liability and criminal consequences?

 

Posted by M. Hirt.

21 Jul 2019: BRAZIL'S M&A SCENARIO

A comprehensive M&A report provided by TTR (Transaction Track Record database) reveals that the United States ranks first for inbound acquisitions in Brazil. 

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There were 108 acquisitions completed by US companies in 2018, totaling almost US$ 8 Billion dollars. The deals concentrate in Information Technology (22 deals), Financial and Insurance (16), Internet (15), Healthcare (15), Distribution and Retail (12), Oil and Gas (10), and in other acquisitions in relevant sectors such as Agriculture, Chemical, Transport, Consultancy and Engineering.

 

In a report entitled “Latin America’s missing middle of midsize firms and middle-class spending power”, on May 2019, McKinsey presents an important overview about Emerging Markets dynamics, focusing specifically on Brazil, Mexico and Colombia. More here.

 

One of the main drivers of GDP growth in the region has been the expansion of the labor force, as a result of the demographic boom. Brazil is a large consumer market, the 9 th world’s largest economy, with a population of around 210 million people, and although many are still vulnerable, there is a repressed consumer market with high potential.

 

In Latin America smaller companies employs a large contingency of the population, with an elevated degree of informality and productivity issues to be addressed. The challenge is to improve this environment and offer ways to them to be more competitive and by consequence empowering the labor force with better compensation, boosting domestic demand and developing the consumer market.

 

Find more information here.

 

Posted by Daniel Rivera.

24 Jun 2019: LATEST TRENDS IN M&A TRANSACTIONS IN ITALY

If 2018 was a remarkable year for the Italian M&A sector, both in terms of number of transactions and value, 2019 started with a net drop continuing the outlined trend of last year´s fourth trimester.

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This, reflecting a complicated Italian and European scenario.

 

According to KPMG´s report on Italian M&A activity, volumes remained almost unchanged at 165 transactions against the 167 closed the previous year. However, a significant drop in the market is observed in the value of transactions: The first trimester of 2019 recorded closed operations for 4.3 billion euros; less than half the 10 billion in the first quarter of 2018 (see chart below for more data)

 

According to experts, the main reasons for the contraction are to be found in (i) the uncertain political framework (Internal political instability as well as external: Brexit, the European elections, the change at the top of the ECB), (ii) the slowdown in expected GDP growth, but, above all, the average expected multiples on the Ebitda of companies on the market, which 2018´s very high values the market does not regard as sustainable expectations (10x vs 8.3 in 2015, 7x in 2010 and 7.6 in 2005 for Private Equity and strategic acquisitions- KPMG). In addition, due to the mentioned political and economic framework debt for acquisitions is less readily available.

 

In this context, however, there are sectors of the market that continue to progress. Cosmetics, design and furnishings, the software world and food are sectors that will continue to prosper in the coming months of 2019. The sectors with low technological and innovative content (manufacturing sectors and producers of intermediate goods), are instead those that risk suffering the most.

 

According to some observers, the remainder of 2019 will be a “not very lively year” and characterized by strong caution with more contained multiples; always keeping in mind that in a country with a strong manufacturing vocation like Italy the “industrial logic” tends to prevail over financial trends.

 

Post by Studio Alberti.

20 Jun 2019: BAUM CLOSES THE FIRST ROUND OF FINANCING OF ALIAS ROBOTICS

BAUM, together with BSK, closes the first round of financing of Alias Robotics for an amount of 750,000 euros, which will be completed with a second round of financing for another three million euros in 2020.

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This investment has been provided by the founders of the startup, as well as by several private investors, including Baron Capital and other professional investors.

In this time, Alias Robotics has made a niche worldwide with the development of a product for robotics that allows analysis of the behavior of industrial robots, identifying malfunctions, external computer attacks or alterations of the 'Blackbox' that controls the operation of these robotic devices. The Spanish company's business forecasts for 2019 will multiply by 10 the business registered in 2018, surpassing those foreseen in the firm's strategic plan.

In parallel, Alias Robotics is offering and consolidating its security consulting services for companies that use robots for their automation processes as well as for robotics manufacturers. Among them is one of the leaders in the field of collaborative robots: Acutronic Robotics. More here.

 

Post by BAUM.

21 May 2019: ICFN GLOBAL SUMMIT, MAY 21ST 2019

ICFN members have met in Vienna to exchange ideas on how to further strengthen the network to support clients in their international growth strategies.

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In the past years the network has successfully expanded its geographical scope to cover relevant markets in Europe, the US/South America and Asia and has seen growing cross-border activities and interesting deal flow within the network. The event was deemed a big success by all participants, again emphasizing the advantages of being able to work on an international level with partners sharing common ethical and business standards.

12 Apr 2019: ARTIFICIAL INTELLIGENCE AND INDUSTRY 4.0/IOT

Bitkom has published a recent survey conducted by Bitkom Research on the use of artificial intelligence in German industrial enterprises. 

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According to the survey 12 percent of German industrial enterprises are already using artificial intelligence in the context of Industry 4.0.

 

49 percent of companies interviewed expect that machine learning, allowing for an exchange of data from different sources, error prediction and problem solving in the context of Industry 4.0 will profoundly change existing business models. Artificial intelligence in smart factories is expected to improve scalability and reduce costs especially for personnel, maintenance, inspection and development.

 

With regards to connectivity in general more than half of the companies surveyed are using special applications for Industry 4.0 and 21 percent are planning to do so. On average approx. one quarter of all machines in the German manufacturing industry are already linked to the internet. See all survey results in Bitkom’s April 1, 2019 press release.

 

Post by S. Legtmann

12 Mar 2019: 3D PRINTING INDUSTRY BOOSTS M&A

3D printing is set to have radical implications on manufacturing companies. With the pace of technological development in the sector, manufacturer´s sourcing practices and production strategies are entering a new dimension.

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According to the 3D Printing Industry site, 3D printing market is expected to reach USD 30.19 billion by 2022, at a CAGR of 28.5% between 2016 and 2022. 3D printing is used to develop prototypes and end products in industries such as automotive, medical, aerospace, defense, dental, art, architecture, fashion designing, biomedical, jewelry, interior designing and more. Electronics, spacecraft, construction, organ transplantations, food, robotics and other industries have also started adopting the 3D printing technology. The market is expanding rapidly,and is now focusing on the production of end parts with the development of technologies and metal powdered materials.

 

Desktop Metal, a company that this summer raised $115 million from a group of investors, including Google Ventures, epitomizes this boom. Desktop Metal’s claim to fame is that it’s platform can be used to 3D print things in metal 20 times cheaper and 100 times faster.

 

Desktop Metal is not the only company showing great progress. Australian Titomic’s printer can print a titanium bicycle frame in 25 minutes, a test de force that helped the company record an impressive IPO on the Australian stock market. NASA has also been working with 3D printing to make rocket parts.

 

As is often the case, new technological solutions and advances have led to M&A activity. The driving factors behind the increase in M&A activities include the need to increase scale, substantial growth of startup companies, the intense competition, and the need for companies to improve their technology, product, and services portfolio.

GE’s acquisitions of Arcam and SLM Solutions, worth a combined $1.4 billion, is the start to M&A good times for 3D printing.

 

Other large companies are making similar acquisitions: Siemens, acquired Material Solutions and HP bought David Vision Systems, pointing out a target to establish itself as a producer of 3D printers that can print objects in metal.

In the start-up landscape, CB Insights data shows that funding activity is also on the rise, with Ultimaker picking up $17 M and Carbon 3D $81 M.

 

The race for competition in the market will still intensify in an extraordinary way, making new products and innovations lead to an increase in product/service extensions, which in turn will boost M&A activity in the sector.

 

Post by A. Arteaga

21 Dec 2018: PORTUGUESE MERGERS AND ACQUISITIONS MARKET – END OF THIRD QUARTER OF 2018

Since the beginning of the year, 224 mergers and acquisitions transactions have been carried out in Portugal, totaling a closing of 16 billion euros. 

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These figures represent respectively a 12% decrease and an 81% increase over the same period in 2017. And the value of operations this year is inflated by the takeover bid launched in May by China Three Gorges over EDP – Energias de Portugal, amounting to EUR 9.1 billion.

 

Sectors such as real estate, technology, finance, and tourism & hotels, respectively registered 57, 33, 23 and 18 transactions.

 

In September, there were 22 deals, - which represent a drop of 21% - for a total of 224 million euros, 26% down in comparable terms.

 

These numbers includes Mergers and Acquisitions, Private Equity and Venture Capital.

 

Posted by V. Afonso

16 Nov 2018: INTENSE ACTIVITY IN THE VACATION RENTAL SECTOR

Investment activity in the vacation rental sector, a specific sector within travel tech, is intense.

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The growth of platforms such as Airbnb has generated a set of companies and business models focused on providing services to this new holiday model: channel or reservation managers, property managers, ...

Recent operations have refocused on the sector, such as the $8.5 million round closed by Properly, a provider of cleaning services for owners, or the $64 million B series closed by the property manager VACASA.

Such is the attraction of the sector that traditional players such as Accor (hotels) or SOCIMIS (Real Estate Investment Companies) have placed the focus of investment in the vacation rental sector.

The question now is whether this amount of investment will allow the sector to evolve in a healthy way in the medium term.

 

Post by A. Arteaga

17 Sep 2018: DEALROOM AND ICFN-MEMBER ELIT CAPITAL ANNOUNCE STRATEGIC PARTNERSHIP TO ADDRESS THE PAIN-POINTS OF M&A PROFESSIONALS AND OUTDATED TECHNOLOGY

DealRoom is an industry leading virtual data room software, as well as the only solution that combines file sharing with project management for mergers and acquisitions (M&A) due diligence.

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Elit Capital is an independent firm, specialized in financial and strategic advisory for corporate transactions, M&A, complex divestments and cross border deals, focused on maximizing clients shareholders value and a member of ICFN.

 

The strategic partnership between DealRoom and Elit Capital will leverage an unparalleled level of capability and global reach to offer corporate M&A solutions which ensure a 40% faster due diligence process along with analytics that track buyer behavior.

 

Through this partnership, the companies will collaborate closely on product development and broad customer engagement in order to further educate the industry on agile M&A and its benefits. Agile M&A enables an iterative process that focuses on client needs first, puts team interaction over tasks, and adapts to the current project state instead of following an inflexible plan.

 

Speaking about the partnership, Daniel Rivera, Elit Capital’s CEO, said: “A key part of Elit Capital’s strategy is growth within mergers and acquisitions. This partnership with DealRoom further enhances the skills and capabilities to accelerate our ambitions in this sector.”

 

Kison Patel, CEO of DealRoom added: “DealRoom has always been an innovative and customer-centric company, so we are pleased share our software as a value add. The capability fit between our two companies is very clear. Beyond that, we are excited about this opportunity because we share a common belief in efficiency for our customer. Our complementary capabilities and shared values make me confident that this partnership will flourish.”

 

Post by D. Rivera

04 Sep 2018: LEGALTECH & M&A

We are witnessing a real revolution in business law.

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On the one hand, the main technological trends of our times (robotics, artificial intelligence, bitcoin and blockchain, industry 4.0,...), represent a challenge for legal firms to be able to advise their clients in these sectors, and require constant investment in training and new technologies.

 

But, even more importantly, these technological trends, especially artificial intelligence, have a direct impact on the sector, mainly by automating repetitive processes with little added value. A new wave of startups has arrived to create a new sector, legaltech, made up of companies that generate technology for the legal sector (according to Thomson Reuters, in recent years the number of patents in the legal field has multiplied by 5), and tech-centric alternative legal providers (Axiom Law).

 

All major firms worldwide have their own developments in artificial intelligence. And even the Big Four are adopting certain strategies in this field (for example, the recent acquisition of Riverside Legal, a technology-based legal advisory firm).

 

Post by A. Arteaga

30 Aug 2018: DUTCH MID MARKET SHOWS LOTS OF OPPORTUNITIES

The Dutch M&A market is, equal to the European market, at its highest point in 10 years. 

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Due to the large amount of capital flowing in to the market and private equity shifting to smaller (mid market) deals, prices still increase. As a result the Dutch mid market shows a yearly significant increase in the number of deals. The ‘hunger’ for deals by private equity and the large amounts of capital made the average mid market transaction multiples show an increase year on year.

 

The recent average transaction multiples (EBITDA) per industry and the % of transactions per industry are as follows:

- IT 6,1 (17%)

- Healthcare 6,0 (6%)

- Wholesale 5,65 (12%)

- Agricultural & Food 5,5 (5%)

- Industry 5,25 (16%)

- Services 4,95 (21%)

- Advertising & communication 4,65 (3%)

- Building & Construction 4,05 (8%)

- Hospitality / tourism 4,0 (5%)

- Automotive, transport & logistics 3,75 (5%)

- Retail 3,65 (2%)

 

Since transaction multiples have shown a year on year increase the last few years and private equity and strategic buyers are still looking for interesting deals (add ons) in the mid market, more and more business owners are now considering to sell their business.

 

Post by B. Brusche

30 Jun 2018: SPANISH TILE SECTOR INVESTMENT AT ITS PRIME

The Spanish province of Castellón continues to play a leading role in the consolidation of the tile sector. 

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A consolidation process driven by private equity. Some of these companies (Equipe and Rocersa) have passed bankruptcy proceedings due to the financial crisis and have emerged stronger thanks to the increase in exports.

 

Miura Private Equity has recently taken a majority stake in the tile manufacturer “Equipe Cerámicas” for an estimated value of €80M, which represents a multiple of about 6x ebitda. Additionally, Rocersa, which also faced real struggle during the crisis, is now experiencing an increase of about 20% in the turnover (€50M). Indeed, Rocersa has been acquired by an American investment fund, Avenue Capital. Even though the value of the transaction remains unknown, the debt is to be restructured in order to obtain profitability.

 

Last but not least, SK Capital Partners have just materialized the acquisition of Halcón Cerámicas, which turnover in 2017 was about a 130 millions €. The transaction means around €180M Enterprise Value and represents a multiple of about 6x ebitda (€30M).

 

Post by A. Arteaga

05 Jun 2018: KEY POINTS FOR SUCCESSFUL NEGOTIATIONS

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  • Seek personal contact with the people with whom you are negotiating
  • Learn to be a "people first" person
  • Make sure that all sides, at least subjectively, come out of the negotiation as winners
  • Prepare yourself well for negotiations and create alternatives to a bad negotiation result


Post by M. Hirt

04 May 2018: 4 GOOD REASONS TO SELL YOUR TECHNOLOGY COMPANY

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  1. If your company is a top performer in an attractive market with good growth, then right now may be the right moment to sell at a top valuation.
  2. If the growth of your market is already beginning to weaken, but your company is well positioned to continue to gain market share, it may also be a good time to sell.
  3. If you see a technology change in your market in good time and come to the conclusion that an investment in the new technology does not pay off for you, or is associated with too high a risk, you should sell.
  4. When important patents of your company expire in a few years and you find a buyer in time who can do more than you with the remaining term of the patents and market access.


Posted by M. Hirt

24 Apr 2018: 4TH ICFN GLOBAL SUMMIT IN MADRID

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ICFN members met on April 24, 2018 for the fourth ICFN Global Summit. New Alliance Members for Asia and the UK were introduced to the Network. Exchanging ideas on how to facilitate and stimulate deal flow through the network and further increase value to ICFN members‘ clients the meeting brought new adjustments to ICFN strategy to line up with the growth of the network. In 2018/19 ICFN will be further expanding its geographical scope covering selected additional regions worldwide.