Merger Archives - Achieve Corporation

Markross121_ December 21, 2020 No Comments

Mergers & Acquisitions Modelling

Achieve Corporation act as either the buy or sell side advisors on corporate transitions. This experience in a dual role gives us a valuable insight into the metrics, thought process and modelling needed to successfully plan the financial aspects of a merger or acquisition.

Our modelling can be used as either a:

Pitch deck to seek funding for a project
Back up financials for sign off at Board level planning committee
Feasibility studies to highlight potential financial synergies on acquiring targets in either a horizontal or vertical sector

The Achieve Corporation M&A modelling includes:

Acquirer & Target Models – Map financials, 3-statement model, discounted cash flow model
Deal Assumptions – Inputs, synergies, financing, value added and goodwill
Accretion/Dilution – Pro forma per share metrics
Closing Balance Sheet – Acquirer + target, adjustments, goodwill and pro forma
Sensitivity Analysis – Intrinsic value per share, ROE, ROI, changes in assumptions
Pro Forma Model – Combination of synergies, 3-statement model, Discounted Cash Flow

For a discussion in the strictest confidence about the benefits of our M&A model, please contact Mark Roberts Senior Partner at Mark@achieve-corproation.com

Markross121_ September 8, 2020 No Comments

Online Travel Ticketing Company – Turnover £53 Million

Client – Online Travel Ticketing Company – Turnover £53 Million.

Instruction – Prepare ‘Pitch Deck’ for presentation to Target 250 FTSE Companies.

Role – Pitch Deck created with DCF Model. Pyramid ROI,ROE and Risk Management. Calculated micro financials for planned merger and or acquisition by Targets.

Result – Managed competitive bidding scenario resulting in multiple offers above 22% of share price.

Markross121_ June 3, 2020 No Comments

Marston’s and Carlsberg UK announce £780m merger

Brewer Marston’s is to merge with Carlsberg’s UK arm, uniting ales such as Pedigree and Hobgoblin with Danish Pilsner and Somersby cider.

Marston Carlsberg Merger

The joint venture is valued at £780m, with stock market-listed Marston’s taking a 40% stake in the merged firm.

The deal involves Marston’s six breweries and distribution depots, but not its 1,400 pubs.

The new Carlsberg Marstons Brewery Company will create “synergies and productivity” benefits, Marston’s said.

Marston’s employs a total 14,000 people.

Carlsberg UK will put its Northampton brewery, London Fields brewery, and national distribution centre into the joint venture. Marston’s will put in its six national and regional breweries – Marston’s, Banks’s, Wychwood, Jennings, Ringwood and Eagle – and 11 distribution depots.

The deal means Carlsberg will have access to Marston’s pubs to sell a wider range of brands.

Ralph Findlay, chief executive of Wolverhampton-based Marston’s, said the joint venture brings together companies known for heritage and brand portfolio.

Tomasz Blawat, managing director of Carlsberg UK, said the deal enables the companies to offer “a bigger beer portfolio of complementary international, national and regional brands”.

The coronavirus lockdown means UK pubs are closed, with many in the industry saying that a mooted re-opening with a two-metre rule for customers would not work. Some pub operators have suggested that a one-metre rule might be a better compromise.

Yahoo Japan and Line set to merge

Japan’s biggest search engine and messaging app are set to merge under a deal agreed by their parent companies.

Yahoo Japan is the country’s biggest search engine, and has e-commerce and online banking subsidiaries.

Line is the country’s dominant messaging app, and is also popular in Southeast Asia and Taiwan.

Analysts say the merger will help the companies compete with Japan’s other online giants.

Yahoo Japan has long offered a diverse range of services but has lagged behind many of its competitors, said Seijiro Takeshita, from the University of Shizuoka.

“This will be a very big headache and threat to the players like NTT Docomo and Rakuten,” he said.

Big in Japan

While Google is the predominant search engine in the US and Europe, Yahoo is Japan’s most popular search engine.

More than 50 million people visit Yahoo Japan’s website every month.

Yahoo Japan is no longer linked to its US namesake, which sold its remaining stake in the company in 2018.

Line, which is owned by South Korean company Naver, has roughly 80 million users in Japan and a similar number in Southeast Asia and Taiwan.

The app itself is perhaps best known for cartoonish stickers, a feature which its competitors have also adopted.

In recent years, Yahoo Japan’s parent company, Softbank, has bet billions on primarily Asian-based tech companies.

The deal could also make it a dominant player in the payments market in Japan.

Softbank already has its own payment service PayPay.

With this deal, it will scoop up Linepay, which is used by many of its competitors.

“I think there will be a lot of game-changing issues that will go on,” said Mr Takeshita.

JD Sports’ Footasylum takeover could be bad for shoppers, says CMA

The UK’s competition watchdog has said JD Sports’ £90m deal to buy its smaller rival Footasylum could result in higher prices and that it will carry out an investigation unless JD can address its concerns.

The Competition and Markets Authority (CMA) said its initial investigation found the deal could result in a “substantial lessening of competition”.

The CMA is concerned this could result in a worse deal for shoppers through higher prices, reduced choice or worsening customer service. “JD Sports must now address the concerns identified or face a further, more in-depth investigation,” it said.

Colin Raftery, a senior director at the CMA, said: “JD Sports is already by far the largest player in the growing sports fashion sector, so any deal that results in it buying up one of its closest competitors could clearly give cause for concern.

“Our investigation has shown us that JD Sports and Footasylum have been competing strongly across the UK, with a sports fashion offering that few other retailers are able to match.”

Peter Cowgill, JD Sports’ executive chair, said: “We continue to believe that Footasylum would be a positive addition to the group, bringing a differentiated customer demographic and fashion-led product range that is complementary to our existing business.

“We also believe that there will be significant operational and strategic benefits from a combination of the two businesses. Our discussions with the CMA are ongoing as we consider whether to proceed to phase two or if acceptable remedies can be agreed at this stage.”

Flutter shares jump 14 per cent on £11bn merger with Stars Group to create one of the world’s largest gambling firms

Flutter Entertainment and Nasdaq- and Toronto-listed Stars Group said today they were merging in a deal that will create one of the world’s largest gambling businesses.

Shareholders in Flutter, formerly known as Paddy Power Betfair, will own approximately 54.6 per cent of the new company with Stars shareholders owning approximately 45.3 per cent of the combined group.

The combined revenue of the two businesses in 2018 was £3.8bn and their combined market capitalisation is £11bn, enough to make it one of the world’s largest online betting and gaming operators globally.

The new business will be based in Dublin, with a premium listing on the London Stock Exchange and a secondary listing on Euronext Dublin.

Flutter shares jumped nearly 14 per cent this morning to 8,700p.

News of the deal also boosted other gambling stocks, with William Hill up 3.65 per cent, 888 Holdings up 1.8 per cent and GVC Holdings up nearly one per cent.

The two businesses said the merger would help the combined group crack the US market which is liberalising its gambling rules.

The pair said the deal would create value for shareholders with pre-tax cost-synergies of £140m per annum along with lower finance costs.

Flutter chief executive Peter Jackson will be chief executive of the combined group with Flutter chair Gary McGann taking the role of chair.

Flutter has entered into third-party deals in the US with Fox Sports, Fastball Holdings and Boyd Interactive Gaming conditional on the merger going ahead.

CBS, Viacom enter streaming wars with $30B combination

In the latest example of major consolidation in the media industry, CBS and Viacom have officially agreed to conduct a long-awaited merger, creating a new company called ViacomCBS with a combined market cap of around $30 billion. The deal will merge CBS’s broadcast offerings and the Showtime network with MTV, Comedy Central, the Paramount film studio and other Viacom brands, adding a broad collection of new content to CBS All Access, the network’s existing streaming service.

As consumer tastes have evolved and in-home streaming has emerged as perhaps the dominant entertainment form of our time, many of the industry’s biggest players have turned to M&A to augment their offerings. It’s been a little more than a year since AT&T acquired Time Warner for $85 billion, adding brands like HBO and Turner to its stable. And earlier this year, Disney beat out Comcast to purchase a raft of TV and film assets from 21st Century Fox for approximately $71 billion, making major content additions ahead of the planned launch of its Disney+ streaming service. Disney also took control of Hulu earlier this year, valuing the streaming pioneer at $15 billion.

The newly formed ViacomCBS, though, will be considerably smaller than some of its streaming competition. AT&T and Disney both have market caps of over $240 billion, making them more than 8x the size of ViacomCBS. Netflix carries a market cap of more than $135 billion, even after its stock has slid in recent weeks in the wake of disappointing 2Q results.

The combination of Viacom and CBS has long been rumored, due largely to the very close ties between the two New York-based companies. They were in fact the same company until 2006, when media tycoon Sumner Redstone split them into two entities. Redstone and his National Amusements holding business have maintained control over both Viacom and CBS in the years since, with his daughter Shari Redstone assuming more power in recent years as her father has reportedly battled health issues.

Current Viacom president and CEO Bob Bakish will assume those same roles at the new ViacomCBS, while Joe Ianniello, the acting head of CBS, will remain in charge of CBS-branded assets. Ianniello has been the interim CEO at CBS since longtime leader Leslie Moonves stepped down last September following several allegations of sexual harassment.

Just Eat £9bn merger plan sends shares soaring

The prospect of a multibillion-pound bidding war for Just Eat sent shares in the FTSE 100-listed business surging by more than a fifth on Monday.

Just Eat agreed terms with its Dutch rival Takeaway.com in a deal that would create one of the world’s biggest online food delivery companies.

When announced, the £9bn combination valued Just Eat shares at 731p and the UK company’s share capital at £5bn.

Speculation about a rival bidder pushed Just Eat shares comfortably above the offer terms. The UK company’s shares closed up 22.7% at 780p.

Under the terms of the agreement, Just Eat shareholders would receive 0.09744 Takeaway.com shares for each Just Eat share and would own 52.2% of the combined group. It would be headquartered in Amsterdam and listed on the London Stock Exchange, with a “significant part of its operations” in the UK.

Analysts speculated there could be a counterbid, possibly from the Berlin-based Delivery Hero or the South African internet and media company Naspers.

There have been a flurry of deals in the fast-growing online food delivery market, with competition heating up from Uber Eats and Deliveroo. Just Eat bought the UK firm HungryHouse in January 2018, and in December Takeaway.com acquired Delivery Hero’s food delivery business in Germany.

Analysts at Jefferies thought the most likely counter-bidder would come from outside the industry, such as Japan’s SoftBank, Amazon or private equity.

A bid from Uber Eats or Deliveroo would raise competition issues, and these could also affect Amazon. After it became the lead investor in a $757m (£451m) financing round in Deliveroo in May, Amazon was ordered by the UK’s Competition and Markets Authority to halt any integration efforts pending an investigation into potential breaches of competition rules.

Combined, Just Eat and Takeaway.com had 360m orders worth €7.3bn in 2018 and strong positions in the UK, Germany, the Netherlands and Canada.

Under the plans, Takeaway.com’s boss, Jitse Groen, would become chief executive of the new company. It would be chaired by the Just Eat chairman, Mike Evans, while the Takeaway.com chairman, Adriaan Nühn, would be vice-chairman. The Just Eat chief financial officer, Paul Harrison, would take on the same role for the combined group, and its interim chief executive, Peter Duffy, would leave.

Groen has described the UK as one of the best three markets in Europe, along with the Netherlands and Poland. Takeaway.com was founded in 2000 and operates in 10 European countries as well as Israel and Vietnam, but it does not have a presence in the UK. The two companies have little geographical overlap apart from Switzerland.

Analysts at Barclays said: “Just Eat shareholders would be getting the best operator in the space to run the business – a notable shift from missed execution from management in the last few years.”

Just Eat has come under pressure from its activist shareholder Cat Rock Capital to merge with Takeaway.com, in which the US hedge fund also holds a stake.

Jungle Creations in talks to merge with influencer marketing agency Goat

Social media publisher Jungle Creations and influencer marketing outfit Goat Agency are in talks to merge into a media and marketing powerhouse, according to sources close to the deal in each company.

Execs from both London-based companies are currently at Cannes Lions and are still thrashing out the terms of the merger, The Drum can reveal. Last year, Goat and Jungle both bid for cash-strapped Unilad – but were defeated by LadBible. They have since changed course and believe merging a media firm with an influencer network would forge an attractive and dynamic proposition for brands.

Jungle Creations is the owner of viral social media verticals like VT (26 million followers across Facebook, Instagram, and YouTube) and food channel Twisted (16 million on Facebook) and also runs six London food delivery kitchens. The company boasts 110 million followers across all of its verticals. Additional channels include Four Nine (female facing), Level Fitness, World Unknown (travel and adventure), Four Nine (DIY) and Craft Factory (craft).

Goat, which currently boasts 120 staff, would power up Jungle’s campaigns with “data-led influencer marketing”. It currently has relationships with Formula E, Malibu, and Lidl (Dream Big with the FA). It has additional offices in New York and Singapore and would almost double Jungle’s 130-strong team. Furthermore, Goat snapped up Social Media Agency/Team of the Year at The Drum Social Buzz Awards in 2018.

One source said: “The media landscape is changing with social becoming a core focus for brands to spread their message and story. The coming together of two major players in the social media industry to create a full offering to clients is an obvious and strategic move to further investment in these areas.”

The source said the merger offers significant expansion opportunities in the US and Asia for a combined entity. Together they would boast annual revenue figures of over £40m.

In the last year, Jungle has been on the talent acquisition path, hiring Dylan Davenport, managing partner at Adam&EveDDB, to lead its new agency The Wild which launched in March. It also secured its first chief marketing officer in 2018 in The Guardian’s Charlotte Emmerson.

Leveraging Jungle’s scale, Wild can identify and tap into social media trends for a client roster which currently includes Diageo, Kraft Heinz and The National Lottery. It works with partners across creative, content, strategy and distribution and Wild’s first creative work, ‘Project Celt’ for The National Lottery, landed in April.

Earlier this year Jungle won the B2C Branded Content Team of the Year gong at The Drum Online Media Awards, showing it has been effective in quickly scaling up its creative proposition for brands.

Raytheon and United Technologies announce $121bn merger

Trump says he is a ‘little concerned’ about the deal and wants ‘to see that we don’t hurt our competition’

United Technologies and defense contractor Raytheon have agreed a $121bn merger that will create the world’s second-largest defense contractor.

The new company, to be called Raytheon Technologies, which will make Tomahawk missiles, the F-35 fighter jet engine and space suits for astronauts among other items, would have sales of about $74bn in 2019. It will be the second largest defense contractor behind Boeing and ahead of Lockheed Martin.

The merger, the largest of the year so far, will have to be approved by competition authorities and was questioned by Donald Trump on Monday. Trump told CNBC that he was a “little concerned” about the deal and that while he would like to see it go through he added: “I want to see that we don’t hurt our competition.”

Trump said aerospace companies had “all merged in so it’s hard to negotiate” with them and suggested the defense industry could be heading in the same direction.

UTC and Raytheon do not compete directly in many markets and the deal may not attract significant scrutiny. The companies expect approval by 2020. “I think from a regulatory standpoint, the beauty of this deal is there’s very little overlap … But really less than 10 jurisdictions have to approve this. We don’t have to go to China. We truly believe that we’re going to get this done relatively quickly,” Gregory Hayes, chairman and chief executive officer of United Technologies, said in a call with analysts.

There have been a series of mergers in the defense contracting sector in recent years, driven by modest growth in US spending. Companies have argued that they need greater scale to compete and spend on research and technology.

United Technologies’ aerospace business makes engines for Airbus as well as the F-35, which was developed by Lockheed Martin and is the most expensive military project in history. Last year United announced it was spinning off its escalator and air-conditioner businesses, which included the Otis elevator brand and Carrier air conditioners.

Raytheon makes missile defense and radar systems, including the Patriot missiles and other military technology used by militaries around the world.

Together the two companies employ about 180,000 people worldwide. United technologies said the merger would lead to $1bn in cost savings.

“The combination of United Technologies and Raytheon will define the future of aerospace and defense,” said Hayes. “Our two companies have iconic brands that share a long history of innovation, customer focus and proven execution. By joining forces, we will have unsurpassed technology and expanded R&D capabilities that will allow us to invest through business cycles and address our customers’ highest priorities.”

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