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Optiv confirms ‘temporary’ UK closure and turns attention to M&A

Security giant says it is still committed to European expansion

US-based MSSP Optiv has confirmed what it called a “downsizing” of its UK operation, claiming the move is temporary as it turns its attention to M&A.

CRN reported yesterday that Optiv was in the process of shutting down in the UK, keeping on a handful of staff to continue any outstanding customer transactions.


In a statement Optiv called the move “temporary”, insisting that it still has plans to build a presence in Europe and has looked at 40 European businesses to acquire before deciding it “simply couldn’t justify the high valuations of these companies”.

“After a comprehensive strategic review, we’re temporarily downsizing our London-based organic operations,” Optiv said.

“We remain committed to serving the European market, clients, partners and prospects,” it added, claiming it could acquire “once European valuations right-size”.

Optiv’s CMO had previously said that the firm looked at acquiring the likes of SecureData and SecureLink, opting against making a bid because it thought the pair were overvalued.

SecureData was bought last year for a multiple of 20 times its EBITDA.

Micky Patel – partner at August Equity, which sold SecureData to Orange – told CRN earlier this year that the multiple was achieved because SecureData was unique in that it was a cybersecurity service provider that had scaled.

A panel of private equity investors also told delegates at CRN‘s Channel Conference MSP that they believe high multiples are here to stay.


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WeWork has acquired more than 20 companies in the run-up to its IPO

In their endeavors to scale operations and improve their brands, VC-backed companies have turned to robust M&A activity in recent years. Taking notes from consumer-facing platforms such as Facebook and Twitter, who led the way to establish how private companies can grow from strategic acquisitions before their historic rides to the public markets, WeWork has acquired 21 startups to date, with a bulk of those investments sealed in the last three years.

The co-working giant raised nearly $1 billion in VC funding before it made its first acquisition in 2015 with Case, which provides building design and information-modeling services. And in a bid to either grow the current business or explore opportunities in other industries, WeWork is currently one of the most active VC-backed acquirers in the space.

How many of those investments were directly related to the company’s space-as-a-service offering? According to a recent PitchBook analyst note, the split of acquisitions made by WeWork related to the core business versus noncore is an estimated 60-40. Notable acquisitions that currently have little to do with WeWork’s office rental focus include Flatiron School, which offers a coding education platform and Islands Media, the developer of a messaging app for college students.

The co-working giant revealed mounting losses in its S-1 filing last month. However, its appetite to acquire startups that range from the developer an office sign-in system to a behavior-analytics platform, indicates that buying tech or venturing beyond its core business via an acquisition seems to be the preferred route for WeWork, instead of building the same thing in-house.

While mega-deals from deep-pocketed investors such as SoftBank or eye-popping valuation step-ups may have favored WeWork’s acquisition strategies so far, it’s difficult to say whether the business will continue to pick up startups at the same rate in the future, especially as it plans to seek a valuation of between $20 billion and $30 billion in its upcoming IPO, slashing its last private market valuation, according to The Wall Street Journal.

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Leeds-based ticketing platform acquired by Festicket

Leeds-based ticketing platform, Event Genius, has been acquired by Festicket, the world’s largest platform for music festival experiences.

The sale includes Event Genius’s consumer facing brand, Ticket Arena. The terms of the deal have not been disclosed.

The new offering, known as Event Genius by Festicket, will create an “end-to-end platform for organisers and fans alike, providing the most complete offering in the live entertainment industry”.

Founded by managing director Reshad Hossenally (pictured above) in 2008, Event Genius offers complete event solutions to events including Wales Rally GB, Motion Bristol, Annie Mac’s Lost & Found Festival, Summer Daze, Ibiza Rocks and BPM Festival.

Following the acquisition, Festicket will roll out the new offering to festivals, concerts, clubs, sports, family attractions and other events worldwide.

Based in Leeds and London, Event Genius and Ticket Arena has worked with over 1.9 million customers and generated over €400 million worth of sales.

Festicket, founded in 2012 by Zack Sabban and Jonathan Younes, is backed by investors including Beringea, Edge, Lepe Partners and ProFounders. It was ranked as the UK’s 21st fastest-growing technology company by the Sunday Times Tech Track 100 in 2018.

Zack Sabban, CEO and co-founder at Festicket, said: “The acquisition transforms Festicket’s product set. In Event Genius, we have found a company that shares our mission to be a disruptive force in the live entertainment market and – ultimately – to bring the best possible experiences to fans. Reshad and the team have built a great product they have good reason to be proud of, and I look forward to welcoming them to the Festicket family.”

Hossenally, who will join Festicket as chief supply chain officer, said: “The Event Genius mission has always been to utilise technology to bring event organisers and consumers a better experience, regardless of the size or type of event. Couple this with Festicket’s global marketplace and supplier network and we have something truly unique for the events industry.”

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Fans at crisis club Bury turn out to clean up their stadium

Bury have been given until 5pm on Tuesday to secure their future, with current owner Steve Dale in talks with data analytics company C&N Sporting Risk over a potential takeover.

However, EFL executive chair Debbie Jevans has suggested that deadline could be extended if only “one per cent” of the deal remains to be completed.

Volunteers have been arriving at Gigg Lane this morning to help after an appeal from the club to help clean up the stadium.

“Whilst the EFL and our potential new owners proceed with their necessary paperwork and dealings, the club needs to prepare the Stadium in order for Saturdays EFL Sky Bet League One clash with Doncaster Rovers to take place.

“With Tuesday’s deadline firmly set, preparations for our first game of the season will commence at 9:00am on Tuesday morning.”

“Recent events, over the summer months, have left the club with just a skeleton staff and we must, therefore, call on voluntary help in order to get the Stadium ready.”

– Bury FC

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Green Investment Group acquires Tysvaer onshore wind farm in Norway

The Tysvaer onshore wind farm is one of the renewable energy projects being developed by GIG and will comprise 11 Siemens Gamesa 4.3MW turbines.

Green Investment Group (GIG), a Macquarie Group company, has announced the acquisition of the 47MW Tysvaer Onshore Wind Farm in Norway from Spanish Power.

The acquisition is GIG’s first development in Norway, expanding the company’s presence in the Nordic region.

Previously, GIG had acquired Markbygden, Overturingen and Hornamossen onshore wind farms in Sweden.

Located in the Tysvaer municipality within Rogaland Fylke in southern Norway, the Tysvaer onshore wind farm is one of the renewable energy projects being developed by GIG and will comprise 11 Siemens Gamesa 4.3MW turbines.

Tysvaer Onshore Wind Farm is in the final stages of planning

The project, which is in the final stages of planning, is being studied by the Norwegian Water Resources and Energy Directorate (NVE).

The company received outline planning consent in July 2018 and amended layouts are expected to be finalised in October 2019.

GIG is using several Norwegian supply chain companies to deliver the project, which will support high-value jobs during the construction and operations.

Nordisk Vindkraft has been selected as construction manager. RISA will be responsible for the construction of roads, turbine foundations and the installation of electric cables.

The project is being developed directly by GIG and construction is expected to commence in early 2020.

When fully operational, the Tysvaer onshore wind farm will produce enough low-carbon electricity to power the equivalent of 8,750 Norwegian homes every year.

The wind farm will also displace around 8,000 tonnes of CO2 emissions, the equivalent of removing 2,500 cars from the road.

Green Investment Group Europe head Edward Northam said: “Norway is blessed with some of the best renewable resources in Europe which have already enabled the country to deliver a virtually zero-carbon electricity system.

“But the ambition doesn’t end there. Norway’s goal of achieving emissions neutrality is one of the most impressive low-carbon visions anywhere in the world and I’m delighted that GIG is able to help drive Norway’s green shift.”

Green Investment Group was launched initially by the UK government in 2012 and was acquired by the Macquarie Group in 2017.

Recently, it entered the Polish wind market by acquiring the 42MW Kisielice onshore wind farm from Impax New Energy.

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PDC Energy to acquire SRC Energy for £1.4bn

The merger of the two oil and natural gas exploration and production companies is expected to create the second largest producer in the DJ Basin

PDC Energy has agreed to acquire rival US oil and gas company SRC Energy for about $1.7bn (£1.39bn) in an all-stock transaction to create a premier mid-cap operator with peer-leading cost structure and free cash flow profile.

The total consideration includes SRC Energy’s net debt of around $685m (£560.53m) as of 30 June 2019.

Headquartered in Colorado, PDC Energy operates in the Wattenberg Field in the state and also in the Delaware Basin in West Texas. The company’s operations are centred on the liquid-rich horizontal Niobrara and Codell plays in the Wattenberg Field and the liquid-rich Wolfcamp zones located in the Delaware Basin.

SRC Energy, which is also based in Colorado, has been operating since 2008. The company’s oil and gas assets are located mainly in the Wattenberg Field in the Denver-Julesburg Basin (DJ Basin) in northeast Colorado.

Following the merger, PDC Energy will expand its acreage in Wattenberg to nearly 182,000 net acres, of which almost 100% is located in Weld County, Colorado.

The second quarter 2019 total production of the enlarged company is around 200,000 barrels of oil equivalent (Boe) per day. The combined company is expected to become the second largest producer in the DJ Basin, and will also hold nearly 36,000 net acres of acreage in Delaware Basin.

PDC Energy president and CEO Bart Brookman said: “SRC’s complementary, high-quality assets in the Core Wattenberg, coupled with our existing inventory and track record of operational excellence will create a best-in-class operator with the size, scale and financial positioning to thrive in today’s market.

“We remain committed to our core Delaware Basin acreage position and are confident the combined company with its multi-basin focus will be well-positioned to deliver superior shareholder returns.”

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Here are the world’s 10 largest M&A deals this year

Chevron on Friday agreed to acquire Anadarko Petroleum in a transaction valued at $47.5 billion, including equity and debt. Under the agreement, Chevron will acquire all of the outstanding shares of Anadarko for $65 a share — a 37% premium to Thursday’s closing price. Anadarko shareholders will receive a mixture of cash and stock.

Chevron is the second-largest US energy company behind Exxon Mobil and the transaction will expand the company’s capabilities in US shale oil and gas production. Many industry commentators have indicated consolidation in the fragmented sector is overdue, prompting speculation of further deal activity.

This year, 108 deals with a value of over $600 billion have been announced. North America was the most active region, however, Saudi Aramco’s $61.9 billion purchase of Saudi Basic Industries was a notable transaction outside the region. Energy deals so far this year have topped $110 billion, including both the Anadarko and the Saudi Basic Industries transactions.

Here are 10 of the largest M&A deals so far this year in ascending order of their valuation size:

Ultimate Software/Hellman & Friedman

Sector: High technology

Target name: Ultimate Software

Target nation: United States

Acquirer name: An investor group led by Hellman & Friedman

Acquirer nation: United States

Deal value net debt: $10.4 billion

Date Announced: February 4, 2019


Newmont Mining/Goldcorp

Sector: Materials

Target name: Goldcorp

Target nation: Canada

Acquirer name: Newmont Mining

Acquirer nation: United States

Deal value net debt: $12.5 billion

Date Announced: January 14



Sector: Healthcare

Target name: Wellcare

Target nation: United States

Acquirer name: Centene

Acquirer nation: United States

Deal value net debt: $13.5 billion

Date Announced: March 27


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Print M&A activity shows no sign of abating

While mergers and acquisitions are nothing new in print, the latest PrintWeek Top 500 found that there were at least 77 deals involving UK printers between March 2018 and March 2019 – the busiest period in M&A activity in recent years.

And things have not slowed down since, with deals involving companies big and small still happening in nearly every corner of the industry.

Among those finalised in the past month alone include DG3’s purchase of Newnorth, Bell & Bain’s merger via acquisition of J Thomson Colour Printers, and Positive ID Labels’ double buy of Banbury Labels and Dabbon Labels.

Suppliers have also seen their fair share of action, with Japan Pulp and Paper’s acquisition earlier this month of Premier Paper Group heading up the recent moves on that front.

Hopefully all these deals will prove successful, but acquisitions can, and do, go wrong for companies that cannot financially or strategically support their ambitions or, indeed, for a myriad of other reasons.

“Acquisitions can make sense, but be wary and be very clear why it’s advantageous to your business,” warns BPIF chief executive Charles Jarrold.

“Similarly, be sure to understand the business and do your due diligence on the acquisition before finding out late in the day that things are not what you expected. I used to work for a big US company who used the term ‘deal zeal’ – the buzz of getting caught up in an exciting acquisition can impede clear judgement.”

But acquisitions are nevertheless very popular in print as the industry continues to consolidate to ease overcapacity and increasing labour and raw materials costs.

They are also far and away the most popular form of M&A activity, with true 50/50 mergers proving incredibly rare in print, the only one listed in the latest Top 500 being Bright-source’s merger with Signal, which was already its sister company to begin with.

Many acquisitions, however, are promoted as being a merger via branding, communications with clients and PR.

“Mergers ae often billed as 50/50, but the reality is that this is rare in practice,” says Jarrold.

“There isn’t room to duplicate all functions, so one team or another, or one person or another, need to lead and businesses need clear structures and management processes. There is however room for making sure that the best of each business wins through – probably not 50/50, but a dispassionate look at what’s best.”

Richmond Capital Partners director Kevin Barron says true 50/50 mergers are often a “needs must deal” that happens when two companies that cannot afford to buy each other join forces to eliminate excess capacity.

“Generally you would start a new company that acquires the two companies, then at some point there is a rationalisation that goes on but that generally takes six to 12 months to work its way through, because you can’t merge companies in five minutes.

“So you end up with duplication for a while. We knew of one company who didn’t rationalise quickly enough and ended up with four finance directors.

“And egos can get in the way with 50/50 mergers – ‘my business is better than yours’.”


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The market’s showing sparks of life with recent mergers, acquisitions

While Main Street investors had some trepidation over their portfolios during the six-week-long pullback in the stock market, the pros see many positives.

Sell-offs are a common corrective action, which is needed in order to move higher.

The fact is, the stock market just rallied 1,200 points in the first two weeks of June. Much of that is due to the Federal Reserve admitting it went too far in raising rates.

Another positive sign is the quality of the current initial public offerings, and the volume of mergers and acquisitions.

There are some very good indications that this bull market may not be as fragile as the pessimists say.

The IPO market has been strong, with 14 offerings this year — up more than 50 percent from last year. And these aren’t hope-and-a-prayer companies, as in the dot-com era.

Today’s IPOs are coming out — in some cases — with billions in revenues and well-established business models in high-growth areas.

Sure, some are better than others in terms of stock performance. The biggest ones, Uber and Lyft, both got a flat reception and remain underwater from their IPO price. Their issues were valuation and offering size. But they are each credible, established businesses.

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Scots packaging firm Macfarlane expands in England

Glasgow-based packaging firm Macfarlane Group has expanded in England with a new acquisition.

Macfarlane, which is the UK’s biggest protective packaging distributor, bought Buckinghamshire-based Ecopac (UK) Ltd in a deal worth up to £3.9m.

Ecopac generated sales of £6m and pre-tax profits of £500,000 in the year ended 31 March 2018.

It focuses on customers based near its 60,000 sq ft facilities near Aylesbury.

Macfarlane said Ecopac was a profitable packaging business that would be earnings-enhancing in its first full year in the group.

Ecopac is the latest in a series of acquisitions by Macfarlane within the past two years.

In September 2017, it bought two Nottingham firms in a deal worth up to £16.75m. It later bought Leicester-based Tyler Packaging and Harrisons Packaging, based in Lancashire.

Macfarlane recently reported a ninth year of successive growth.

Sales were £217m in in 2018, up from £196m the year before. Pre-tax profits were at £11.2m – 20% ahead of 2017.

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