Deal barometer February 2019

The start of 2019 has been packed with activity within the UK private equity and venture capitalist community. See below a round-up of February’s latest and significant PE news.

If you would like to discuss how Norman Broadbent can help your business, please contact Kristian Lee on kristian.lee@normanbroadbentinterim.com or +44 (0)  20 7484 0119

  • Dentons advised Graphite Capital on the sale of UK healthcare brand sk:n to TriSpan. Nicholas Plant, co-leader of Dentons’ global Private Equity Practice said: “We are delighted to have advised Graphite, a longstanding client, on the successful sale of this business.” 
  • Dublin-based Causeway Capital Partners stepped in and saved Patisserie Valerie. The “heritage brand” has been bought out of administration after an alleged fraud caused its collapse last month. On completion, Causeway said they hope to keep all 96 sites open. 
  • Financial services-focused firm Preservation Capital Partners – which last year acquired an interest in the insurTech-driven cyber and specialty lines MGA Ascent Underwriting (Ascent) – has made a strategic investment in US construction-focused MGA Cove Programs (Cove). Together they will manage over USD200 million GWP, making it one of the largest independently owned emerging risk and specialty lines MGAs. Ascent and Cove will continue to operate under their respective market-leading brands. 
  • Dorna Sports – the commercial rights holder for the motorcycling sport of MotoGP – was acquired by Bridgepoint in 2006. Bridgepoint are currently in talks with investors to shift its stake from one fund to another thus bypassing a sale to rivals. Bridgepoint – who valued the company at circa €500m – declined to comment. This comes after Bridgepoint appointed Lazard late last year to explore a potential sale generating rumoured interest from private equity groups such as CVC, Eurazeo, Blackstone, General Atlantic and KKR. 
  • Motor finance brokerage Evolution has secured investment from private equity investor LDC. This investment has seen several NED appointments including LDC Directors Andrew Lyndon and Lawrence Dean. In addition, Steve Weller is to be appointed non-executive Chairman (ex CEO of LDC backed uSwitch) along with NED Tim Porter (ex-managing director of Lex Autolease). 
  • Exponent Private Equity is expected to agree to a restructuring of Bullitt Group, the branded mobile phone designer. The change of control is expected to see the Business Growth Fund – a £2.5bn vehicle set up by the UK’s biggest high street lenders in the aftermath of the financial crisis – play a leading role in Bullitt’s future. 
  • LDC invested £437m during 2018 in 23 new deals, a record for the business.  LDC – which typically invests between £5m and £100m in a single transaction – said the deals were driven by continuing demand for private equity from UK SMEs.
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Private Equity: The end of a Golden Age?

Whatever your views, Brexit uncertainty continues to raise questions for the PE and VC Community. These range from passporting arrangements for fund marketing, through to the potential disruption of ongoing fundraising, and the management of existing portfolios.

Whatever the outcome, the UK Market is still providing good opportunities. According to the Centre for Entrepreneurs, the UK registered more than 663,000 new businesses in 2018, many of which will be looking to the VC industry for funding at some point. Equally, a number of privately owned established businesses will look for strategic investment at some stage in their lifetime.

A key component in all activity however is people.

Norman Broadbent Group has been supporting investors and their portfolio companies in a number of different ways. Increasingly, this means helping to identify and engage with Interim Executives at pre-deal stage, who are able to bring detailed sector knowledge and insight during due diligence. Often retained for a defined (and short) period of time, with clearly defined deliverables, our research has shown that:

 

  • 39% of Interims were extended post-deal to support management and provide an additional useful link between the investors and the business. Post-deal, (and usually mid-cycle), Interims have been used to replace and/or supplement management teams for a variety of different reasons

 

  • 86% of PE firms who hired an Interim, appointed at a time of change (including gap management) where speed to hire was critical

 

  • 76% of all assignments required an Interim who had previously worked with Private Equity investors

 

  • In the main, Interims were engaged to fulfill the roles of CFO and CTO. However, in 2018, our research shows a 37% increase in demand for Interim CEOs as well

 

  • Whilst most demand was for the UK, we are forecasting greater international need. Q4 of 2018 saw an increase in global portfolio roles especially in Finance and Operations.

 

  • In terms of specific sectors, there was a noticeable uptick in and around Health. This has been driven by the trend for healthy eating, as well as technology enablers related to sport and well-being. Whether driven by Millennials, or a shift in public opinion, this sector seems to be growing. These types of companies have already seen success in 2018, with investments including vegan meal delivery business, AllPlants‘ £7.5 million funding investment from Octopus Ventures. We have has also seen growth in all things ‘green’, namely renewables, recycling, and green energy.

Technology has played a significant part of our Interim work undertaken in 2018 and anticipated for 2019. The demise of the high street, and the growth of online shopping, has created demand for technology to deliver the very best experience, the very best product, at the very best price (and quickly). End-to-end solutions have demanded both experienced Technologists with ideas to create innovative platforms, and agile fulfillment and logistics to deliver a positive customer experience.

It may be that 2012-2018 will be viewed by some as the PE ‘Golden Age’ due to exceptionally generous economic conditions. However, with 40 years experience of providing people solutions into the ever changing world of PE, we’re sure there is both excitement and challenge ahead!

If you would like to find out more about how we can help you, or discuss a specific assignment, please do not hesitate to contact Kristian Lee, Director, +44 (0)  20 7484 0119 or via kristian.lee@normanbroadbentinterim.com for an initial confidential discussion

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Deal barometer

The following deals have all taken place during the last few months, covering the full breadth of the wider  marketplace.

If you would like to discuss how Norman Broadbent can help your business, please contact Kristian Lee on kristian.lee@normanbroadbentinterim.com or +44 (0)  20 7484 0119

 

  • Beringea has led a £9 million investment in AccessPay, the Manchester-based fin-tech company providing money transfer and fraud prevention technologies for corporate clients.
  • Synova Capital sold insurance broker Stackhouse Poland to Arthur J Gallagher for around £275 million, generating a 5.6x return on its initial investment in 2014,
  • Seafood restaurant chaIn Rockfish, operating in the South West of England, has received a multimillion-pound investment from Gresham House with the aim of tripling the number of restaurants over the next four years.
  • Investment funds including Apollo have sold hot tub manufacturer Jacuzzi to Italian PE firm Investindustrial for an undisclosed sum. The company reported sales of £388 million in 2018
  • Edition Capital has announced its second investment in London-based Hotpod Yoga, Europe’s largest yoga business. The deal secures £1.6m to support the next stage of Hotpod’s expansion and franchise development. Investment is being made through Edition EIS, a high-growth portfolio service focused on Leisure opportunities.
  • YYX Capital has purchased London-based Mahabis, rescuing the luxury slippers brand from administration. In 2016 – 2017, Mahabis took in sales of £25 million and profits of £2.5 million;
  • Beringea has a led a £6.5 million investment in Exonar, a data privacy and cyber security company, alongside existing investors Downing Ventures, Amadeus Capital Partners and Winton Ventures
  • Augmentum Fintech has announced a £4 million investment into Farewell, a start-up that enables UK customers to write and manage their own will online
  • Goldman Sachs has taken a stake in UK digital wealth manager Nutmeg as part of a £45 million funding round.
  • Acuris, the owner of Mergermarket, is reported to have attracted interest from US and European private equity groups after putting the financial information service business up for sale following a valuation of more than £1 billion,
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Private Equity seeks more (and better) CFO’s

“Our research has shown that during 2017

there was a 46% increase in demand for CFO’s by Private Equity”

 

Angela Hickmore

Managing Director

Norman Broadbent Interim Management

 

Research conducted by Norman Broadbent Interim Management has shown a marked increase in demand for interim CFO’s within Private Equity owned companies. As investors strive to generate the best, most sustainable returns in the shortest possible time, they will often ‘swap out’ an existing CFO for one with a turnaround/value-build mind-set, skills and experience to effect change quickly.

 

Commenting on the research findings, Angela Hickmore Managing Director of Norman Broadbent Interim Management said:

 

“It is unsurprising that Private Equity investors are increasing their usage of Interim Executives as post-acquisition having the best management team in place is critical.  Experienced Senior Interims are highly skilled professionals, who embed themselves into the business and its issues quickly.  As outcome-driven individuals, they work at pace and understand the need for focussed management and results. They are ideal for a PE environment.”

 

She added “As investors face complex business issues within their portfolios, Private Equity is clearly becoming more reliant than ever on Senior Interim Professionals.  As the industry grows, it is this kind of interim talent who are often best positioned to make the biggest impact. This isn’t just at C-Suite level, but also across areas such as Finance, Operations, Sales, Marketing/Distribution, Digital and Supply Chain.”

 

About Norman Broadbent Group

 

Norman Broadbent Group Plc (LON: AIM) specialise in Leadership Acquisition & Advisory services.  With a 40 year track record, our service offerings include Board & Leadership Search, Interim Management, Research & Insight and Leadership Consulting.

 

For further information please contact:

 

Angela Hickmore

Managing Director 

Switch: +44 (0) 20 7484 0000
DDI: +44 (0) 20 7484 0153
Mobile: +44 (0) 7483 015 584
Email: angela.hickmore@normanbroadbentinterim.com
Web: www.normanbroadbent.com

 

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Mitigating Risk … Maximising Return

PE: Improving ROI, Mitigating Risk & Maximising return

By Angela Hickmore, Managing Director, Norman Broadbent Interim

 

It is clear when speaking to Private Equity professionals, that besides the price they buy and sell at, a factor underpinning investment success is getting the leadership right!

 

When it comes to the latter, this is where we come in.

 

Norman Broadbent Group increasingly supports Private Equity by ensuring the most effective and impactful management teams are in place. We work with professional investors to help them maximise the opportunity and minimise the risk. Sometimes, it is about bringing additional bandwidth to the leadership team; other times, it is about replacement.

 

The key to success is not just finding those candidates with the right experience, but ensuring they have the tenacity and mind-set necessary for a results driven, fast-paced Private Equity environment.

 

Enter Interim 

 

Impactful Senior Interims offer an instant solution. They are highly skilled specialists who hit the ground running and quickly embed themselves into a business. As outcome-driven professionals, they achieve results quickly and understand the need for strong, focused management. With increasingly hungry and fast-paced Private Equity professionals facing more and more complex business issues within their portfolios, they are now more reliant than ever on Senior Interims.

 

Why Interim Professionals work well with Private Equity

 

  • They are ‘trouble-shooters’ with wide experience, which makes them effective quickly
  • They are execution-focused and work to achieve specific outcomes
  • They are objective and decisive
  • They adapt to their environment quickly
  • They can be introduced at short-notice – often within days – resulting in immediate impact
  • They ‘get’ Private Equity
  • They accept high levels of accountability
  • They work at pace and embrace change
  • They are ‘current’; because they move from assignment to assignment, they are often best placed to keep Private Equity up to date with sector trends and changes
  • They are ‘starter-finishers’

 

Senior Interim Executives offer a diverse range of expertise, are level-headed, and are agile with a pragmatic ‘get-it-done’ approach. In summary, this unique combination of attitude, mind-set, and experience is what makes a successful Senior Interim Professional.

 

Why Norman Broadbent Interim works well with Private Equity

 

The need for, and reliance on, strong and effective management teams will increase as the Private Equity sector grows.

 

Typically, we support Private Equity by introducing them to the very best, most relevant, Senior Interim Professionals in either a pre- or post-sale environment. These are not just within leadership roles but also across areas such as Finance, Operations, Sales, Marketing/Distribution, Digital, and Supply Chain.

 

Over the years, our heritage has enabled us to gain a great understanding of the professional investment community.  As investment in innovative, growing businesses is vital to the UK economy, we like to think we are playing a small part in its success in the way we support our Private Equity partners.

 

If you would like to hear more about how we may be able to help your business, please contact Angela Hickmore, Managing Director, Norman Broadbent Interim for an initial confidential discussion.

 

Switch: +44 (0) 20 7484 0000

Email: angela.hickmore@normanbroadbentinterim.com

 

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