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Markross121_ January 2, 2019 No Comments

Wagamama workers to share £4m Christmas bonus after chain’s sale

Staff to receive up to £2,000 each following £559m takeover by Restaurant Group

Wagamama staff are to receive Christmas bonuses of up to £2,000 each after the £559m sale of the restaurant chain.

Around 4,000 staff will share in a £4m bonus pot as part of a payout ordered by the outgoing chief executive, Jane Holbrook, and Wagamama’s former private equity owner Duke Street.

Head chefs and managers will bank £2,000 each, while waiting staff will pocket £1,000, provided they have worked at Wagamama for more than 12 months.

It is understood that the bonus is meant as a token of appreciation from Holbrook and Duke Street, which will receive a massive windfall from Wagamama’s sale.

Duke Street acquired Wagamama in 2011 for £215m and last month sold the chain to Frankie & Benny’s owner, the Restaurant Group.

The Restaurant Group chief executive, Andy McCue, plans to accelerate the rollout of Wagamama across the UK, expand concessions and pilot pan-Asian cuisine “food-to-go” offerings.

The firm will also explore international growth opportunities for Wagamama.

As part of the deal, Emma Woods will replace Holbrook as chief executive and the chairman, Allan Leighton, will join the Restaurant Group board.

When it was first announced in October, the deal raised eyebrows as it comes at an increasingly challenging time for the eating-out sector, which is suffering from a slowdown in consumer spending.

Unilever buys meat-free food company The Vegetarian Butcher

Acquisition of Dutch brand highlights scramble to tap into meat substitutes market

Tofu turkey is on the table for this Christmas, just one ingredient of a surge in the meat alternatives market.

Unilever is buying the meat-substitute company The Vegetarian Butcher as it looks to cash in on the growing number of consumers turning their backs on meat.

Founded by the former cattle farmer Jaap Korteweg, the Dutch brand’s quirky products – which include “nochicken” nuggets and “chickburgers”, apparently with the same “taste and structure” as patties made out of chicken – have earned it a cult following among vegetarians and vegans.

In the UK, its products are sold largely through healthfood shops, and also in Waitrose.

Unilever’s Nitin Paranjpe said it had been attracted to the brand’s “clear mission” and strong position in a booming market for meat alternatives.

The deal comes as manufacturers, supermarkets and restaurants scramble to tap into the burgeoning vegan market, which has expanded as more people drop meat from their diet for health or ethical reasons. The UK has an estimated 22 million “flexitarians” – those who enjoy meat but want to reduce their consumption. Last month a plant-based burger that “bleeds”, from the US brand Beyond Meat, made its debut in Tesco.

Unilever, which owns household brands from Magnum to Marmite, said the acquisition of The Vegetarian Butcher, for an undisclosed sum, fitted its strategy to move into healthier plant-based foods with a lower environmental impact. Unilever already sells 700 vegan and vegetarian products under existing brands such as Knorr, Hellmann’s and Ben & Jerry’s.

“The brand will fit in well within our portfolio of ‘brands with purpose’ which have a positive social impact [and] are better positioned to meet the needs of consumers,” said Paranjpe. Last year Unilever, which also owns PG Tips and Liptons, bought Bristol-based ethical tea brand Pukka Herbs.

Visa to buy British payments firm Earthport for £198m

Visa has made a £198m takeover bid for British payments company Earthport.

Shares in the firm rocketed by 270 per cent on Thursday after the offer was announced to the London Stock Exchange.

Earthport specialises in cross-border payments, with clients including Bank of America Merrill Lynch, Ripple and TransferWise.

The company was founded in 1997 and employs more than 200 people across offices in London, New York, Miami, Dubai and Singapore.

Its chair, Sunil Sabharwal, said the firm saw the offer as an “opportunity for shareholders to realise an immediate and attractive cash value in Earthport”.

The deal values Earthport at a 250 per cent premium to its average share price in the six months to 24 December.

Mr Sabharwal added: “Visa shares our vision of growth and expansion for Earthport and, as such, we believe it is a suitable and appropriate partner for our employees, partners, customers and other stakeholders.”

Amanda Mesler, chief executive of Earthport, said: “Having been appointed as Earthport’s CEO in July, my focus following a full strategic review has been to rapidly implement a transformational growth strategy. Whilst I believe Earthport is well positioned to deliver the potential it has always possessed, the all-cash offer from Visa represents a very attractive and immediate return for our shareholders.”

GlaxoSmithKline and Pfizer merge healthcare arms

Painkiller brands Panadol and Anadin will be bought under one roof under a giant deal between drug firms GlaxoSmithKline and Pfizer.

The firms are combining their consumer healthcare businesses into one firm with annual sales of £9.8bn ($12.7bn).

Other brands involved in the deal include Aquafresh toothpaste and Chapstick lip balm.

The deal still needs approval by shareholders and regulators. Shares in GSK rose 7% on the news.

GSK’s consumer healthcare division used to operate as a joint venture with Swiss firm Novartis, but it acquired full control of the business nine months ago.

GSK, which will have 68% of the new business, said the deal was a “compelling opportunity” to build on that earlier buyout of Novartis and deliver stronger sales.

“Through the combination of GSK and Pfizer’s consumer healthcare businesses, we will create substantial further value for shareholders,” said GSK chief executive Emma Walmsley.

“Ultimately, our goal is to create two exceptional, UK-based global companies, with appropriate capital structures, that are each well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers.”

The joint venture will go by the name of GSK Consumer Healthcare. Apart from GSK’s Nigerian subsidiary, which is excluded from the deal, it will operate in all countries where GSK and Pfizer have a presence.

GSK will have six directors on the board, while Pfizer will have three. The new firm will be spun off and listed separately on the London stock market within three years.

Takeda and Shire shareholders back £46bn drugs takeover

Japanese drugs giant Takeda’s £46bn ($59bn) takeover of Irish pharmaceuticals firm Shire has been approved by both sets of shareholders.

The acquisition, the largest by a Japanese company, propels Takeda into the world’s top 10 list of biggest pharmaceutical companies.

Shire shareholders met in Dublin to approve the deal. Takeda investors gave the green light earlier in the day.

Some Takeda investors objected over fears it will increase the firm’s debt.

The votes to approve the takeover follow a long-running battle in which Takeda made multiple offers for Shire.

On Tuesday, Kazuhisa Takeda, a member of the firm’s founding family, spoke out against the deal over concerns with the level of debt it would add to Takeda.

Takeda plans to finance the takeover via the issue of new shares in exchange for Shire stock, bank loans and bonds.

The takeover is part of Takeda’s strategy to become a global pharmaceutical company. The firm wanted to buy Shire to strengthen its cancer, stomach and brain drug portfolios.

But one of its potentially lucrative treatments will have to be sold off at the direction of European regulators over competition concerns.

“We are delighted that our shareholders have given their strong support to our acquisition of Shire,” said Takeda chief executive Christophe Weber after the investor vote in Osaka.

Shire was founded in the UK, but moved its corporate headquarters to Dublin a decade ago. It has 24,000 employees in 65 countries.

This day in buyout history: Vista teams with Vivek on pioneering software takeover

For tech startups, the late 1990s were a different time. A more IPO-friendly time.

For one such example, we turn to a software provider that’s now well into adulthood—and one that entered private equity ownership four years ago today.

In our current ecosystem, new companies often stay private for a decade or longer, piling up venture capital funding to support long-term growth. But when Tibco Software got up and running in 1997, only two years passed before the company’s public debut. Led by founder Vivek Ranadivé (today the owner of the NBA’s Sacramento Kings), Tibco began trading on the NASDAQ in July 1999 with an offer price of $15 per share.

The move paid off in an immediate way. After less than six months as a public company, Tibco stock closed the year at $153 per share, representing a stunning tenfold increase in market value for the Palo Alto-based maker of business software.

In retrospect, it was a manifestation of a dot-com bubble stretched nearly to the point of bursting. Unlike many of its peers, though, Tibco survived when the bubble ultimately did pop—but it was some time before the company thrived again. Its stock price languished in the single digits into the 2010s, at which point a steady stream of acquisitions began to drive Tibco’s share value up. By 2012, it was over $30 per share. And once that figure started falling again, the buyout firms began to circle.

Ultimately, it was Vista Equity Partners that made a deal, acquiring Tibco for $24 per share in cash in a takeover worth a total of $4.3 billion that was officially announced December 5, 2014. Ranadivé stepped down from his position as CEO, with fellow longtime executive Murray Rode taking over the top spot.

At the time, such a lofty price was rarefied air for a software company being taken private by a PE firm. But in the months and years that immediately followed Vista’s Tibco takeover, such deals experienced a boom—not on the level of the dot-com boom, but certainly a real change in the way software companies were bought and sold.

In April 2015, Thoma Bravo and the Ontario Teachers’ Pension Plan acquired application performance specialist Riverbed Technology for about $3.5 billion. Informatica, a creator of data integration software, sold four months later to a private equity consortium for some $5.3 billion. During 1Q 2016, IT infrastructure specialist SolarWinds sold to Silver Lake and Thoma Bravo for $4.5 billion and Vista sealed another huge deal in the space, buying Solera, which makes risk and protection software, for $6.5 billion. A few months later, Thoma Bravo bought data manager and analytics business Qlik for $3 billion.

Add those deals to the Tibco acquisition and that’s six of the nine most expensive take-private software deals in the US and Europe since the start of 2010, all occurring in a span of just over 20 months, per the PitchBook Platform.

And now, already, the firms that pumped billions of dollars into those take-private transactions are looking to realize their investments. In October, SolarWinds made a return to the public markets with an IPO, less than three years after going private. And in August, Bloomberg reported that Vista had held discussions about selling Tibco, in part to get out from under a debt load that now nears $3 billion.

The software company’s next move is still uncertain. But if the past two decades are any indication, whatever it is, the deal might prove to be at the forefront of another new trend in the public and private markets.

Retail mergers and acquisitions rise by 15% as businesses try to combat falling sales

The number of retail sector mergers and acquisitions has grown by 15 per cent in the last year as companies try to make up for struggling sales, a new study reveals.

Figures compiled by law firm RPC show there have been 37 retail mergers and acquisitions (M&A) deals in the year to 31 March, compared with 32 in 2016-17.

RPC said the recently announced Asda and Sainsbury’s merger was a good example of the recent trend for businesses in the food side of the retail sector to “add economies of scale to make up for slowing organic sales growth”.

Firms are also favouring M&A over flotations, due to weak demand from investors. Selling up to a competitor is seen as a more secure way for existing investors to exit a smaller retailer than an IPO which could be cancelled at any point “due to short-term volatility or poor sentiment towards the sector”.

“Through mergers such as Asda and Sainsbury’s, market leaders are looking beyond all the hype about the ‘meltdown of the high street’ and getting on with building breadth of offering and scale,” said RPC corporate partner Karen Hendy.

However, while the number of deals has jumped, the overall value of those transactions has fallen 16 per cent to £3.7bn, from £4.3bn the year before. Ms Hendy said: “It is important that sellers and creditors are sensible over the prices they are expecting from M&A deals in the current climate.”

Meanwhile, RPC said there is still interest in buying distressed retailers’ assets but buyers are looking for substantial discounts, and the number of retailers entering insolvency has risen by 7 per cent in the last year.

UK M&A deals announced in 2017-18 include:

The Co-op’s approach for Nisa, valued at £143m
Tesco Opticians’ acquisition by Vision Express owner Grandvision
Multiyork Furniture’s acquisition by DFS

Markross121_ December 4, 2018 No Comments

Pret a Manger to give employees £1,000 bonus after £1.5bn sale

Pret a Manger has been sold to investment firm JAB, the sandwich seller announced today, and plans to hand out £1,000 to each of its 12,000 workers when the £1.5bn deal completes.

The ubiquitous high street chain is currently majority owned by private equity group Bridgepoint, as well as other minority shareholders. The sale is expected to be completed by the end of this summer.

Markross121_ November 29, 2018 No Comments

Unilever CEO Polman to retire, replaced by beauty head Jope

Anglo-Dutch consumer goods company Unilever said its CEO Paul Polman was retiring less than two months after a damaging row with shareholders, and would be replaced by the head of its beauty unit Alan Jope from January 1.

Polman’s exit comes after the maker of Dove soap and Ben & Jerry’s ice cream was forced to scrap a plan to move the company headquarters to the Netherlands in October, following an investor revolt.

Jope, 54, is the boss of the beauty and personal care division which is Unilever’s largest, accounting for almost half of group annual profits. He is also a former leader of its China business and has long been seen as a successor to Polman.

“Our global footprint includes strong positions in many important markets for the future and our focus will remain on serving our consumers, and our other multiple stakeholders, to deliver long‐term growth and value creation,” Jope said.

Britain may block Experian-ClearScore credit data merger

Britain’s competition watchdog indicated it may block credit data company Experian’s takeover of rival ClearScore and warned the deal could stifle development of digital products that help customers understand personal finances.

Experian, a FTSE 100 company, wants to expand in Britain with the purchase of ClearScore, which provides free access to credit reports and scores, and introduces consumers to personal financial products.

Experian, the world’s biggest credit data firm, said it was disappointed by the Competition and Markets Authority’s (CMA) provisional findings.

The CMA said its Phase II investigation had found the 275 million pound ($352 million) deal announced in March would potentially harm the development of digital products.

“At this stage, the CMA’s view is that the only effective remedy is prohibition of the merger,” the watchdog said in a statement, adding that it currently believes that no other structural or behavioural remedy is likely to be effective.

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