interactive salon report - maadvisor.net

MAY 2016

THE M&A ADVISOR

INTERACTIVE SALON REPORT GROWTH DRIVERS AND DETERRENTS: 2016 EUROPEAN M&A OUTLOOK In alliance with Merrill Corporation and with the support of Eversheds and Dealgate, The M&A Advisor presented an exclusive Live Web Broadcast, “Growth Drivers and Deterrents – 2016 European M&A Outlook,” from the Eversheds Auditorium on February 22, 2016. Global merger and acquisition announcements topped $5 trillion for the first time in 2015, exceeding the previous record of $4.6 trillion set in 2007. Driven by the UK and Italy, with increases to almost 50 percent of the continent’s total, Europe was the global hotspot for megadeal activity. With increasing confidence among strategic acquirers competing for market position and financial investors looking to utilize available cash, the key quantifiable indicators suggested that this trend was going to continue through 2016. The enthusiasm for dealmaking at year’s end was stronger than ever, deal pipelines were bigger than ever, and cash supply pools remain deeper than ever. Yet, a survey of acquisitive executives late last year suggested they were, in fact, more cautious than ever about the realization of true value through M&A in this market. To discuss the year past and share with us their outlook for what lies ahead in the European M&A market, we assembled a salon roundtable of industry leading investors, advisors, and market watchers. With the first quarter now closed and 2016 year-to-date deal flow sputtering at the starting line, their prognostications are particularly poignant.

We are pleased to share with you, to read and watch, this interactive Salon Report featuring our notable faculty of European M&A experts. We hope that this report is informative and proves valuable for you. And as always, we encourage and welcome your insights on the subject.

Presented by

David Fergusson President & Co-CEO The M&A Advisor [email protected]

GROWTH DRIVERS AND DETERRENTS: 2016 EUROPEAN M&A OUTLOOK

Contents

Presented by

2

Executive Summary

3

Opening Remarks

4

Faculty Introductions

4

The Top of the Cycle or the End of the Cycle?

7

Strategic Buyers Versus Financial Buyers

9

Signs of the End of the Cycle?

11

M&A Sector Analysis

13

Technology and the Fourth Industrial Revolution

14

Public to Private Transactions

16

Brexit or Not?

18

Conclusion

19

Live Web Broadcast Video

20

Contributors’ Profiles

21

About the Sponsor

24

About the Publisher

25


Executive Summary On February 22, 2016, The M&A Advisor produced the second in its series of M&A Advisor Live Broadcasts – “Growth Drivers and Deterrents – 2016 European M&A Outlook” -- from the Eversheds Auditorium in the City of London. The production was supported by Merrill Corporation, Eversheds, and Dealgate. Panelists focused on whether the torrid M&A activity on both sides of the Atlantic since 2014 would continue in 2016 or whether the current cycle is nearing an end. They were divided in their opinions on the staying power of the current M&A cycle. Some saw new opportunities for private equity deals; others forecast a new period of strategic corporate buying activity. But the 500-pound Gorilla in the current cycle could appear this summer in the UK’s national referendum on “Brexit” – whether or not Great Britain should cut its political and financial ties with the European Union. A vote to leave the EU could usher in a period of uncertainty and doubt that could cast a pall over M&A activity for the next several years, according to some dealmakers. Absent a “Brexit”, panelists agreed that M&A opportunities abound in many industries and sectors. Technology remains a huge driver of deals and public to private transactions and may see a comeback in the UK, they observed. Public to private transactions have become more difficult because of new UK regulations, they noted. Questions from the live broadcast’s audience centered on whether the panelists felt “Brexit” would occur. The consensus was that the UK and EU would survive in either case, but the consequences of a “Brexit” on M&A and the economies on both sides of the English Channel would be significant. The live salon broadcast featured: Hosts: Speakers:

Presented by

3

David Fergusson | President and Co-CEO, The M&A Advisor Ben Harrington | Editor, Betaville Anthony (Tony) Dalwood | CEO, Gresham House David Evans | Managing Director, Alvarez & Marsal Robin Johnson | Partner, Global M&A Practice Chair, Eversheds James Morris | Investment Director, LDC Richard Pulford | Managing Director and Head of Manchester Office, DC Advisory


Opening Remarks David Fergusson: This is The M&A Advisor Live from the Eversheds Auditorium in the city of London. The M&A Advisor has been hosting over 2,500 leading dealmakers each year, together with policymakers, media and academics for a discussion on those subjects that are most relevant to our practice of M&A. Increasingly, we’re being asked to assemble small salon-style gatherings for more intimate conversations about those subjects, perhaps considered sometimes more sensitive. We’re very pleased to be able to broadcast and invite you into this room today for a salon-style gathering and a discussion about our outlook for European M&A. During today’s broadcast, you can ask questions of the panelists. Today’s program is being presented by Merrill Corporation. The M&A Advisor and Merrill Corporation share a common goal for the advancement of our industry. Four years ago, we created a series called The Best Practices of the Best Dealmakers. That program has become the most valuable voice of our industry, allowing the inside story to be told by those who make the deals possible. We’re honored to be able to bring you today’s program, the latest installment in our thought leadership collaboration Click Here together with Merrill. Now I’d like you to join me in watching a short presentation about Merrill Corporation.

Faculty Introductions

Presented by

David Fergusson: The M&A Advisor opened our office here in London just 2 years ago, and we’ve been enjoying the opportunity of bringing our services of assembling the leaders, analyzing, and reporting on the trends in the M&A and restructuring markets, not only in the UK, but across Europe too. Long before landing on the ground here, my co-host for today was a valuable, trusted resource to us. His musings on what’s happening, David Fergusson why it’s happening, and what could possibly be happening next is The M&A Advisor something that we’ve come to rely on. Ben, you’ve been on the M&A beat for over a decade now. You’ve worked for every major business publication in this market. Even though you’ve left the masthead per se, you still continue to be consulted and write for those [publications], and I think most impressively for me, since founding Betaville in 2014, you’ve had well over 18 million hits, which tells me that you certainly struck a chord through your journalistic career. Ben Harrington: Thank you very much. David Fergusson: I think your perspective on what’s happening in the market today and the origin of that perspective will be valuable. We will kick off today’s roundtable session with your introduction.

4


“I think from a sell side perspective, it is preparation if you want to have a successful transaction. From a buy side perspective, it means doing as much work as you’re allowed to do so that you actually go in and properly understand the cash flows and the underlying business. In the current market, that’s quite tough.” - David Evans

Ben Harrington: I’ve covered M&A for the last decade. I started off as a junior reporter covering M&A at a publication called Merger Market in the mid-2000s, [and] spent a year-and-a-half there cutting my teeth on M&A reporting. I then moved to The Daily Telegraph [and] worked there for eight years as a staff correspondent covering M&A, private equity, hedge funds and stock markets.Then, a couple of years ago, [I] left The Daily Ben Harrington Telegraph and now I work freelance primarily for the Sunday Times, Betaville the Mail on Sunday, a little bit at the Times, Dow Jones, and I also have a blog called Betaville that’s quite widely read in the City. I’ve been covering M&A and been involved in breaking some quite big M&A stories, including the merger of Carphone Warehouse and Dixons Retail. I’ve also covered the midmarket pretty thoroughly as well. Got a good handle on that. David Fergusson: Thank you, Ben. Anthony Dalwood is the CEO of Gresham House, and certainly a veteran in this marketplace. I’m going to ask you as well to make a self-introduction. Anthony Dalwood: Thanks for that introduction, David. I am Tony Dalwood, currently chief executive at Gresham House plc, a specialist asset manager in illiquid strategies, long-term asset management strategies. Previously, I was at Phillips & Drew Fund Management as a director there for many years. Then I [became] chief executive of SVG Investment Managers & SVG Advisors, which was formerly Schroder Ventures, in London. I’m currently non-executive director of JPMorgan Private Equity plc in Guernsey, and also chair of the Investment Committee of the London Pension Fund Authority, which is viewed as [the] local government pension schemes in the UK. My philosophy was one of the questions we had. I am steeped in a value-style investment philosophy, long-term horizons, and one that focuses on cash flows and what prices you pay for an asset. David Fergusson: Thanks, Tony. David Evans, managing director for Alvarez & Marsal. Greatly appreciate your introduction, and as with Tony, sharing a little bit of your perspective on your philosophy and how it’s evolved over time for M&A here at home.

Presented by

David Evans: David Evans, Managing Director and European practice leader for Alvarez & Marsal. Although we are known primarily for our restructuring services, we also do a lot of work in the transaction and due diligence side. We have a global team of over 200 ex-Big Four professionals, serving primarily the private equity community, but also increasingly the corporate market as the Big Four find themselves increasingly enmeshed with audit-related conflicts, et cetera. I started off my career at Arthur Andersen before joining Deloitte as a partner, where I spent 13 years, lastly heading up their transaction services team in London, and joined Alvarez & Marsal in January. I’m a UK-chartered accountant and I have over 20 years of experience working with both big-ticket private equity and mid-market private equity and multinational corporate clients.

5


In terms of my philosophy, being the numbers guy, the bean counter on the panel, I think from a sell side perspective, it is preparation if you want to have a successful transaction. From a buy side perspective, it means doing as much work as you’re allowed to do so that you actually go in and properly understand the cash flows and the underlying business. In the current market, that’s quite tough, as I’m sure we’ll come to shortly. David Fergusson: Thank you, David. Richard Pulford is the Managing Director at DC Advisory and focused predominantly on the north of the country, but I know with transactions that will take you just about anywhere.

“I think the thing I’m struck with since joining LDC is the appetite to do deals. It’s just incredibly hungry to get out there and make deals work.” - James Morris

Richard Pulford: Thank you, David. Yes, just a little bit more on that. [I’m] Richard Pulford, managing director, DC Advisory. Our firm is a leading European mid-market financial advisory and corporate finance. We define mid-market as transactions from 50 million euros-ish to 500 million euros-ish. We’ll do things either side of that. About 50 percent of the things we do are cross-border. One of the reasons behind that is our ultimate owner is a Japanese investment bank called Daiwa, who are one of the powerhouses in Japanese equities. My own personal background – we’re probably now [in] the third or the fourth M&A boom that I’ve been through after having been more than 20 years in corporate finance. Our philosophy advising clients revolves around timing and dynamics underpinning demand for businesses. What’s the right timing given the demand drivers on the sell side? It certainly feels now is the right time to be the seller of a business. We also advise buyers of businesses. How can you square an M&A boom with still wanting to invest in businesses? I think that’s all about adequately pricing in risk and assessing upside. Timing has got a lot to do with everything we do. I had the last boom in London and I went to Manchester in 2008, exactly two weeks after Lehman [Brothers] fell over, so I’ve seen both ends of the country. David Fergusson: Tremendous. Thanks, Richard. James Morris is the relatively newly installed investment director at LDC. We’d love to hear about the journey to that position, as well as maybe a little bit about your philosophy.

Presented by

James Morris: You’re right. I’m pretty new. I’m the investment director out of the London office of LDC, which is a mid-market, private equity house; [I‘ve] been there eight months. I’m on the new business team, focused on origination. Part of my journey - prior to joining LDC - I spent 10 years at 3i [3i Group PLC], which is a pan-European private equity firm. I started off in business development in Manchester. I know Richard from those days. Moved down to London; ended up being head of research for 3i before coming over to LDC. I think the thing I’m struck with since joining LDC is the appetite to do deals. The firm is just incredibly hungry to get out there and make deals work. When I look back over the history of LDC from a different point of view I think they’re being quite consistent through the cycle about investing. We’ve got a pledge to invest 1.2 billion pounds over the next three years, supported by our partner, which is Lloyds Bank.

6


I think looking forward into the next three years with my crystal ball, we’re going to be talking probably about the global economy, uncertainties, the pricing of assets, debt and some of the political uncertainty. It’s incredibly challenging, but I think what underpins private equity from an LDC point of view is just backing quality management teams. That’s my philosophy, to get out and meet them and build a strong relationships with management. David Fergusson: Thank you, James. Mr. Robin Johnson, global practice leader for Eversheds, someone we’ve enjoyed having on our stage in the United States on several occasions. It’s a pleasure to have you with us today.

“At this

moment in time we seem to have a situation where sellers are able to find buyers, and buyers are able to find sellers. We seem to be in a bit of a perfect M&A environment.” - Robin Johnson

Robin Johnson: Thank you very much for coming to Eversheds, David. Glad to have everyone here. As David said, I’m the leader of the cross-border M&A team at Eversheds, which is about 250 people worldwide. As all of the advisors have mentioned, we’ve seen a significant upturn in activity in the last couple of years. It probably started in [the] summer of 2013. It’s just gradually accelerated to now. In that time, we’ve seen deals done by strategics, both buying and selling. We’ve seen deals by financial sponsors buying and selling. We’ve seen spins. We’ve seen public M&A, and we’ve seen private M&A. We’ve seen venture, so we’ve seen all [the] variety of deals you can think of. I just recently had a hundred of my people in Milan and we had a meeting to discuss what we thought was happening in the market. It’s fair to say that the enthusiasm and the fact that everyone felt they were going to carry on being very busy was very much paramount in that meeting. What was particularly striking was the fact that certain jurisdictions, which have had a bad time, were more confident now. In Southern Europe, there was a sense of optimism. The Nordics were excited about the opportunities notwithstanding the oil crisis. Then [in] other countries which may be more introverted, such as Germany and Italy, we’re seeing opportunities through large private-held companies to actually look internationally at opportunities. I think we’ve got a mixture here of consolidators and aggregators. We’ve got people who are prepared to be consolidated. We’ve got people who want to consolidate. I think the other thing, as Richard mentioned, was that at this moment in time we seem to have a situation where sellers are able to find buyers, and buyers are able to find sellers. We seem to be in a bit of a perfect M&A environment.

The Top of the Cycle or the End of the Cycle?

Presented by

7

David Fergusson: Thank you, Robin. I think probably the best way to kick off the dialogue amongst us is to segue from that “perfect M&A” statement. The big question that I’ve got is: How did we get to where we are? The year of 2015 saw over $5 trillion in announcements. That’s $3.7 trillion in transactions closed. Here in the United Kingdom and across the European continent, how has transpired? How did we get to this point? Why 2015, not 2017, not 2011? Tony, can you lead off that discussion?


Anthony Dalwood: Of course, David. The world and history shows that there are cycles. We’re in another cycle. The bottom of the last cycle was seven years ago. If you look at economic history, the average cycle lasts from seven to ten years. Presto, we’re seven years on. We’re also at the top of another cycle. I’m looking forward to seeing how different it is this time. I think the underlying slight difference here – but it won’t necessarily mean to the outcome in terms of investment returns – is that we’re in a global interest environment this year that is almost zero. The amount of capital flowing around the system is unprecedented. As a result of that, it’s distorting asset pricing. You are seeing that in all different manners at the moment.

“People are trying to look for safety, momentum, and growth. They’re pricing that very highly.” - Anthony Dalwood

At the moment people are trying to look for safety, momentum, and growth. They’re pricing that very highly. Those things, which perhaps have had bumps in the road – profits warnings, or haven’t been able to hit their targets, have been de-rated and de-priced quite substantially – people don’t want to own those. They want to go into the “quality” areas. People have perceived for the last five years that quality is the area they want. If you look back in history – value and growth companies, if you believe in all of that – we’ve had a growth and momentum focus for the last five years. That has led to high valuations particularly in those areas such as TMT (technology, media and telecommunications) and software companies, where average pricing is above 15 times EBITDA multiples, and pretty normal for a software deal. The expected growth from that is going to have to be pretty punchy. However, you can look at the other end of the spectrum, which may be companies that are industrial or cyclical. They’re not really wanted to be owned even on EBITDA or PE multiples of four, five or six. The expectation on growth when you buy something on that level is much lower. The ability to make money, history suggests, is much simpler. I think to answer in summary your question, we’re at the end of another cycle. How long that’s going to last, because of this unusual quantitative easing in interest Anthony Dalwood Gresham House rates, is another matter, but we’re at the end of another cycle. David Fergusson: I’ve heard that perhaps we’re in the middle of the cycle, and this cycle could be a little bit longer than the last one based on where this one began, and just how desperate a situation that we found ourselves in is. James, what’s your perspective on that?

Presented by

James Morris: I don’t really want to call it the cycle. We’re definitely in a cycle. The M&A market is cyclical. As I said in my opening point, for LDC the key is being consistent through the cycle. Last year, we deployed $350 million in equity across 14 assets. Similarly, we did the very same number in 2014, maybe a bit more actually. Consistency is key. In terms of how we got there: I think for us at LDC, we’ve stuck to our knitting and we’ve just maintained the same model. We’ve got a regional network of eight offices, so that gives us great access to management teams and M&A out in the regions and across the UK. Through that, we can build some strong relationships with management teams to get to deals before anyone else.

8


I think overlying now you’ve got the economic conditions, which has sort of bred this situation we are in at the moment. There’s been recovering consumer confidence. It’s been a deflationary environment, and real incomes have risen as a result. This has all made confidence much more tangible and extended the cycle a little bit longer than maybe where it could be.

“We’re in the middle of what’s been described as the biggest financial experiment in history, which is QE. It’s driving seemingly permanently low interest rates. That’s let a lot of money looking for a home.” - Richard Pulford

Richard Pulford: I remember calling the cycle in 2002 and 2007 at the time as a relatively young man in my career thinking, “I don’t quite understand what’s driving values.” I used to hate the phrase “It’s different this time,” which is trotted out each time. I think there are some differences now. Take a look at the two things that drive these cycles. First is confidence, and second is availability and pricing of money. I think the 2002 and 2007 booms, Richard Pulford or the end of those cycles, were driven much more comprehensively DC Advisory by confidence. The tech boom was going to change the world, and it has changed the world, but people just disconnected pricing from the underlying assets. That was a confidence driven boom. The ’07 boom: also confidence driven. I think what’s slightly different this time is, and Tony, you put it really nicely – the unprecedented flows of money. We’re in the middle of what’s been described as the biggest financial experiment in history, which is QE. It’s driving seemingly permanently low interest rates. That’s left a lot of money looking for a home. I think in private equity terms there’s more than a trillion dollars of unspent private equity money looking for a home. A trillion dollars of dry powder. Most of that would be looking in mature economies like [the] US and UK. I think this pricing point is very important because – Tony referred to this – we’re seeing a real bifurcation in the market. The risk aversion oddly enough, I think, has gone up amongst the investors. They are happy to pay much more money than they might otherwise have done in other cycles for incredibly resilient businesses or ones with stellar growth opportunities. Then there are an awful lot of other businesses that really struggle to command strong investment appetite because they don’t have those same characteristics. I’m with Tony in that it naturally feels like we’re nearing the end of a cycle, but I still think there are legs in it because of this availability of money.

Strategic Buyers Versus Financial Buyers David Fergusson: Thank you. I do want to come back to the discussion about strategic buyers versus financial buyers. I think it’s an age-old question, but it feels like it’s particularly relevant right now at whatever stage we are in the cycle. David, let’s have you weigh in on this subject first.

Presented by

9

David Evans: Sure. I agree with everything that’s been said so far, but I think there are a couple of additional factors driving things. One, is that some of the big headline deals that are being driven by the Chinese coming into Europe. They are not necessarily applying normal valuation techniques for companies that have either got good IP or technology that they can then take back to their home markets and exploit there. In particular, a number of private equity companies are looking at brand related acquisitions. It seems like at the last minute a Chinese strategic comes in and pays – blowing everyone out of the water in terms of valuation.


I think the second factor is in the private equity sphere, in the midmarket as defined in the US, which we define as funds with $1 to $5 billion of equity. There are a lot of them in the US – a lot more than there are here in Europe. They are increasingly looking into Europe, where valuations, at least relative to US valuations, have seemed cheap, driven perhaps by the European economies taking a bit longer to recover from the recession. The low euro has certainly helped.

“The feeling I have is that the Chinese do not want to get involved in an auction. They’ll come in with a knockout price to avoid an auction, or they’ll stay out of a process.” - Robin Johnson

About half of the deals we worked on last year at Alvarez & Marsal were with US private equity funds with no presence in Europe coming in and investing in European assets. I think that’s definitely fuelled things. Then finally, when we’re talking about the big megadeals, we shouldn’t ignore the impact of tax, particularly in pharmaceuticals, although tax inversions are a bit of a dirty word and I think [are] not the only reason for some of those deals. There are perfectly decent commercial reasons for the deals, but I think they’ve definitely been a factor when boards sit around the table and they see opportunities to materially reduce their tax bills through acquiring overseas competitors and flipping the tax base that’s definitely driven some of the big headlines deals that we’ve seen in 2015. David Fergusson: I know Ben wants to talk about sectors, and we certainly want to talk about technology and the megadeals because over 50 percent of the megadeals happened here in Europe in 2015. It’s a big question whether that’s going to continue, but it certainly seems to be a very good climate for it. I know you want to talk about sectors, but I wouldn’t mind going around the table just to get some perspective on strategic versus financial buyers. Whose year is it going to be? Is it evenly weighted or is it leaning towards one group or another? Robin? Robin Johnson: What I’m told is that a lot of private equity players are all fighting over the same assets. There’s a scarcity of assets. There are a lot of secondaries and tertiaries going on because there’s a lack of potential new assets out there. Whether that’s actually true or not, I don’t know, because I think this might be the year where privately held companies do start to look at their options as to what they could possibly do in terms of being a consolidator, or an aggregator, or look for an exit. I do think in the privately held world, there are going to be some opportunities. What strategics are telling me is that they’ve dusted off their black books and they have been trying to avoid processes. And have been telling people - “When you’re ready, come to us. We’ll do some sort of a deal with you.” They don’t want to get involved in auctions. It’s interesting what David [Evans] was saying about [the] Chinese. The feeling I have is that the Chinese do not want to get involved in an auction. They’ll come in with a knockout price to avoid an auction or they’ll stay out of a process. I think there’s quite a few strategics who don’t want to waste their time looking in an auction process. There may be a different dynamic here in terms of potentially more bilateral deals.

Presented by

10

I think David [Evans] is also right about the large megadeals. That’s why I think there’s still some energy in this particular cycle because only in the last few weeks we’ve seen Dow and DuPont. We’ve seen Johnson Controls and Tyco. These are just going to feed on more deals in the marketplace. I think a traditional private equity house needs to find some way of finding new deals


other than doing secondaries or tertiaries. At strategics, the boards are giving executives permission to go and look at deals, but I also sense they don’t want to get involved in auction processes. It’s really hard to judge.

Signs of the End of the Cycle? Anthony Dalwood: Again, we’re going to follow a normal cycle. What normally happens towards the end of the cycle is that the corporates say: “I haven’t done anything yet because I’m risk-averse, and I can ride the growth on the way up because the macro environment is helping me. Now, I’ve got shareholders telling me I’ve got to carry on. I’ve got share prices telling me that I’m on 20 times earnings. How am I going to keep that going? Earnings revisions are rolling over. The world is slowing. How am I going to keep that going? I need to do a deal.”

“Corporates are sitting on huge cash balances, record cash balances, a trillion pounds of firepower across private equity.” - James Morris

That’s where we are at the moment. I think the megatrend, the end of the cycle, tends to be the stupendous M&A. We haven’t quite had that. I think that’s going to happen this year. You look at earnings revisions across Europe and indeed the US. They started at 10 percent plus profit growth this year, and they’re down in the low-single digits. Arguably, some people are up to speed and are now putting them at zero. In summary, earnings revision comes down. How are we going to grow this year? I better do a deal. I think we are in that discussion at the trade-biased strategics, as you call them. They’re going to struggle to compete because they’re on 15 times EBITDA, and the trade bars will come in and say “I’ll put 20 percent on that,” and then they’re out of the game. James Morris: I think that’s true, particularly when you understand that corporates are sitting on huge cash balances, record cash balances, a trillion pounds of firepower across private equity. There’s just as much on US as on the UK plc. corporate balance sheets. What does that mean? It just means it’s a good time to sell businesses to corporates. I think, just to plug LDC again, we sold ten businesses last year, delivered half a billion dollars of proceeds, seven of which went to corporates, with a US buyer in one case and a Chinese buyer in another. This is just the international nature of M&A. At the same time, for the PE house, it is good to sell. You’ve got to also invest into the cycle as well, because there’s nothing worse than not investing.

Presented by

Anthony Dalwood: There’s one dynamic which does fit in with what I’m saying, which is the fact that debt is now freely available again, which means that in trade bar, particularly listed, shareholders get very nervous if you’re at four times, three times or five times EBITDA. In fact, it’s not going to be allowed by their shareholders, but it’s normal, the average. It’s normal to have five to six-times EBITDA multiples within a private equity transaction. Robin Johnson: Exactly. I’m sure you’ve seen it. Anthony Dalwood: Actually, I think coming off the top of that cycle in the US in the last two or three months – those debt markets have really been squeezed. We normally see it takes six months or so for that to filter through across to Europe. I think the debt market is one where I’ve been

11


most concerned about what’s been happening. We have had 2007 leverage packages back again over the last 18 months, some of which the businesses will be fine with, but there’s not a lot of headroom if there’s a hiccup along the road for those businesses. It just feels [like] there’s a little bit too much leverage out there at the moment. I think it will be compressing. As soon as that happens, private equity pricing comes down. Going back to your point, traders who were late to the game come in, which is why I think there’s probably another year -18 months, of this cycle to go. David Fergusson: Tony, I’m reminded of a conversation that you and I had in the fall, and you shared a piece of really interesting research that you had done on the cycle of sectors. Those who are in, soon to be out of favor, and how they act and react during that time. I wonder if you could share just a snapshot of that and then I’ll hand it over to Ben to talk a little about the sector outlook for Europe for the year ahead.

“At different points in economic and stock market cycles companies are valued differently. They may be in the value category and then in the growth.” - Anthony Dalwood

Anthony Dalwood: I think you’re referring to the piece Gresham House wrote regarding the value and growth styles of investing. At different points in economic and stock market cycles companies are valued differently. They may be in the value category and then in the growth. If you go back to the late ‘90s, to ’99, the growth companies were of course the TMT. Imperial Tobacco and British American Tobacco were far from growth. They were very much value stocks with a dividend yield of 10 percent. Now, it’s the stable quality business which people put on a P/E ratio of approximately 20 times, which back then was at 7 times price-earnings ratio. The point is things come in and out of fashion, and people place a different expectation or growth multiple on it as a result. We are currently in that dynamic, the last five years with value versus growth – growth has been extremely strong money. Companies are perceived to have momentum and high growth, with only relatively good growth characteristics. Those that are valued on a lower price-to-book have done poorly. That disparity is as bad as it was back in the ’99 peak of the TMT boom, i.e., the value opportunity was significant at that stage. Then the subsequent five years was fantastic for those value companies. You lost half of your money in the growth area, but you almost doubled your money in the value area. Some of the stats out there now suggest we are very close to that point in time again. I would argue it’s simpler to make returns in those where the valuations are lower. Economic history suggests that you can do that.

M&A Sector Analysis David Fergusson: I’m sure that opens up a Pandora’s box for you, Ben, when it comes to sector conversations. Let’s talk a little bit about what’s going to happen and where.

Presented by

12

Ben Harrington: Last year, we saw some of the megadeals that you brought up: Anheuser-Busch going for SABMiller, Royal Dutch Shell going for BG Group, and a whole load of pharmaceutical transactions. I’m not going to speculate on what deals are about to happen. I’m just going to throw it out there and ask Tony where you see M&A, which sectors you think are going to be particularly prevalent for M&A in 2016?


Anthony Dalwood: Normally, it is those where growth is struggling, and management are trying to manage their ratings in terms of the shareholder expectations. What you have is management typically at the helm of these organizations, where they – if they can internally focus, and where [they] are in control – manage the situation and grow their profits. That’s the lowest-risk way of doing so. They’ll focus on that. We’re getting to a stage now, as I said earlier, where it’s harder to achieve internal organic growth. The return on equity cycle – which does exist – it just goes in a nice cycle. It suggests that we’re up towards a peak return on equity, which means it’s harder to generate supernormal returns from this point. If that’s the case, that’s when the M&A advisors come over and say, “We’ve got a trick for you because we can do something, which you can’t internally generate, and why don’t you have a look at it?”

“It’s hard to tell what’s going on in financial services, and whether there’s going to be a lot of activity there. We keep talking about it. It hasn’t happened.” - James Morris

Then they get focused with great advice from these great people to say, “You should do that deal.” Of course, if I’m on a PE of 20 or 15, how do I manage it? Here’s some growth and revenue synergies, which are thrown in for good measure as well as the cost synergies. Then they get motivated and excited by what could be. We are now in that today? Clearly the likes of megapharma – areas where it’s hard to grow because of what’s coming out in all different dynamics in generic competition particularly, and also the likes of exchange rate and currencies. If you go back to the ‘90s, the boring industry was the drinks sector and included Grand Met and Guinness (now Diageo) and they are now the go-go companies. They weren’t back in the ‘90s. You can see that is almost playing out and M&A levels indicate we are towards the end of current cycle. I think if you look at where things are struggling – oil, exploration and production – clearly the return on capital cycle needs to improve. Capital needs to be taken out of that industry. What normally happens – again going back to the ‘90s, when we had the oil at $10 [a barrel] – at that stage we saw an enormous amount of M&A transactions. Then the capital came out in the following three years. Shareholder returns were substantial. In summary, there’s two or three sector areas which I would see some substantial activity. Ben Harrington: James, which sectors do you think are going to be particularly busy this year? James Morris: What I’m hearing from our clients is that they don’t particularly want industrial capacity. That’s not what they’re after. It’s more the technology side of it, but that’s what everyone wants. They want to find the technology that’s going to enhance the business.

Presented by

13

Having said that, I’m also hearing about people who think they can be co-manufacturers and supply goods to companies; that may want to become diverse technology companies rather than diverse industrial companies. We think there’s quite a lot to go on in healthcare. We think there’s actually quite a lot to go on in energy as well; not necessarily straight oil and gas, but looking at maybe some of the renewable investments made and James Morris realizing value in those. That’s not just in the UK. We’re talking about LDC cross-border here.


Someone mentioned consumer earlier. Consumer is driving a lot of opportunities. There are some quite high multiples in consumer. How long that will last for, I don’t know. I just did a deal where it was 20-times, but there were three people after the same asset. It was done in a 2007-style deal in the consumer sector. It’s hard to tell what’s going on in financial services and whether there’s going to be a lot of activity there. We keep talking about it. It hasn’t happened. Ben Harrington: Richard, what are your views? Richard Pulford: I see this driven not by particular sectors, having a set of characteristics. It’s more: What’s an investor looking for? I see clients looking for three things. First is growth. The second, which is linked, is can you grow internationally? Third, can you do so in a way that’s scalable?

“I see clients

looking for three things. First is growth. The second, which is linked, is can you grow internationally? Third, can you do so in a way that’s scalable?” - Richard Pulford

Presented by

That lends itself ultimately to particular end sectors in the mid-market. IT [information technology] is one of them, particularly anything you can build as software-as-a-service with a recurring revenue stream that doesn’t cost you much to bolt on new sources of revenue. Therefore, it flows to the bottom line and commands very strong prices. I think it’s – rather than a sector thing – those aspects of growth, internationalization and scalability that people are looking for.

Technology and the Fourth Industrial Revolution David Fergusson: I have a question from our audience, from someone who’s curious about Chinese enterprises. David [Evans], maybe I can throw this over to you, since it’s an area that I know you focus on. The viewer is particularly interested in what the impact on technology will be through Chinese investment. I would just offer this in the context of our study of technology, and particularly if we all embrace the notion of the fourth industrial revolution, which was the theme of the World Economic Forum this year. Interestingly enough, those companies related to the Internet of Things saw very significant investment levels in 2015. In fact, over 50 percent of those investments in the third and fourth quarter were made by companies with no technology underpinning whatsoever. These were non-technology companies, traditional companies, making investments in technology – to your point, Robin, for the advancement of their business. Some of them expect to have things that will [be] part of that $50 billion item universe that will be communicating with one another, but others are organizations that just want to make sure that they’re secure in the blinding pace of change that’s occurring. How do you think the Chinese could factor into that equation, particularly here in the UK and Europe? David Evans: As I’ve said already, I think we’ve seen a lot of M&A with Chinese companies wishing to effectively acquire established Western technology, and then take that and re-engineer it effectively for their home markets. We haven’t seen as much of the protectionism as there has been in North America, where a number of deals have been blocked because of supra-national concerns around Chinese enterprises – where does the state stop and the corporate start? I completely agree with the broader thesis, and I was going to say: From a sector perspective, I think TMT is an area where there will continue to be deals, driven by the Chinese or by others, because

14


at least in the space where I’ve been operating, we’ve talked about convergence for the past 10 to 15 years. We’re really, truly beginning to see that now, both with the Internet of Things and with smartphones driving all sorts of must-have applications that none of [us] now could probably do without. We didn’t know we even needed them until two or three years ago.

“For those of you

that have got young kids, you’ll see how they’re growing up with technology in completely alien ways to the way we’ve all had to come to interact with it. I think technology will definitely be a driver of M&A.” - David Evans

For those of you that have got young kids, you’ll see how they’re growing up with technology in completely alien ways to the way we’ve all had to come to interact with it. I think technology will definitely be a driver of M&A. Richard, I completely agree with you. With the subscription-type revenue model increasingly being plugged into the TMT category, things that probably wouldn’t have been badged as TMT until recently are now by smart advisors, like you of course. I think Chinese and Indian companies will also look David Evans to acquire established technology, but I still think you can’t overlook Alvarez & Marsal the US. A lot of the technology deals I’ve been involved with have ultimately been driven by US corporates or private equity. They look at what Europe does. Europe’s actually quite innovative in a number of these areas, and there are some really good businesses that have been growing. Robin Johnson: Just on the Chinese point, David, if I may. I think it’s interesting that last week the Fairchild Semiconductor deal was stopped by the US regulators. Let’s see what happens to the Terex deal, where again, there’s been a Chinese player trying to stop the merger between Terex and the Finnish company. Then we saw, three weeks ago, the deal with Syngenta and the Chinese. That actually is going ahead or it would appear to be going ahead at the moment. Think about the difference between Europe and the US. If the Swiss are happy for a deal between Syngenta and a very large Chinese agro-chemical company, but if the US is stopping deals with the Chinese in the US, that’s bound to mean that the Chinese will look at Europe as the opportunity. I think that is why the Chinese will look a lot at Europe in the next year or two. Richard Pulford: It’s quite an interesting parallel with the London property market. If you think what’s driving that, it’s not UK-based employees and their salaries. It’s international flows of money into places that are perceived as a safe haven or certainly safer than the places from which those flows are coming. Those same geopolitical drivers work in M&A as well. There’s a reason why it’s the London property boom, and not the equivalent in Chicago or Philadelphia – because the UK in particular is much more welcoming to international flows of capital.

Presented by

15

David Fergusson: I was sharing that Columbia University hosts an annual BRIC Lab, an emerging markets conference. Three years ago, our legal community of M&A attorneys was figuring out how to align with CFIUS [Committee on Foreign Investment in the United States] - our foreign investment regulatory body. Two years ago, we would have said: “We have figured this out now. This is actually going to be good for America. The bears have come out of hibernation.” Most certainly, it may be the pace of technological change. It may be the application of technology across so many different levels of business, but I think we’ve become frightened again. It wouldn’t surprise me to


see more investment from the Chinese here in the UK, where this is a much more fertile ground for investment, and certainly the application of their technologies is as large combined as it is in the United States. James Morris: Bringing it back to sectors for a moment: I agree exactly with Richard’s point. And Tony, when you talk about value companies, for me, the businesses that look interested are those value companies that are applying some level of technology, whether that’s on their customer acquisition side, or their supply chain, or controlling of costs. It just transforms them from value back into the growth sector. That’s where the PE flies up, that is interesting.

“Access to

capital despite being quoted is very hard. The management teams will quite rightly turn around and say – ‘What’s the point? Why do I bother?’ In fact, it’s happening. ” - Anthony Dalwood

You can almost bunch them onto TMT, and it’s [a question of] how do you categorize TMT. That’s the thing. It’s a bit of a catch-all, isn’t it? [It’s] the way general industrial used to be a catch-all for packaging and aerospace. It’s funny how we describe things in our world. Looking at PE, they do travel in packs. There’s been a whole bunch of travel deals recently, including ourselves. We did an investment in a business called Igloo, and a few other travel agency businesses out there that have been done this year. And one more that we haven’t talked about, which is on the lips of lots of people, particularly the VCs [venture capitalists], is cybersecurity. I know over in the US there’s been a whole ton of money spent particularly by corporates, and that’s going to have a knock-on effect across Europe. Anthony Dalwood: I think if we talk about sectors – public to private in UK and Europe has hardly happened. They go through a cycle for various reasons, particularly the risk appetite from the private equity side. It’s risk appetite and access to capital by the management teams of public companies which is relevant. We are at a cyclical low for that in the last year or so. Access to capital is getting harder in the public markets, particularly for smaller companies. Smaller companies now can go up to a billion pounds in market cap, but let’s talk about 250 million and below. Access to capital despite being quoted is very hard.The management teams will quite rightly turn around and say - “What’s the point? Why do I bother?” In fact, it’s happening. It’s not the normal hunting ground of private equity because you have to go through different risk assessments, such as execution risk.

Public to Private Transactions Richard Pulford: The rules changed a couple of years ago, which make it a little bit harder for private equity to do public to privates [PTPs]. I think one of the underlying things is there doesn’t seem to be a great deal of value. I look at PTPs, and what’s markedly different now than 10 years ago is that there aren’t those companies that are trading on tiny multiples, where there is a proper value arbitrage to be had. Everything’s been uprated, and it’s pretty difficult to find that real value.

Presented by

16

Anthony Dalwood: That’s the interesting bit. What happens then, it takes a while for advisors and management teams to go actually, “I can’t access capital. My rating says this. What’s the next step?” As they get their heads around it, and then they ask, “Where do I go?” I think at the end of this year, we’ll start seeing more of those discussions. You guys will be in the middle of it.


James Morris: You’re absolutely right. Since the new year, we’ve actually had three [PTP transactions]. One was where we had to produce documentation to allow management to do things. The other way to do it for private equity is to get a platform company and then do the public to private where they actually get a platform first and then do a public deal. Robin Johnson: A quoted platform?

“Buying ability is always front of mind for private equity. I think about 80 percent of our portfolio have had some form of bolton acquisition. Obviously, it just depends on the circumstance and the business.” - James Morris

James Morris: No, unquoted. Then, having got the platform ready, use the portfolio company to do the acquisition. I don’t know whether you’re seeing that at all, but that’s the thing I’m hearing. Using portfolio companies to do buy-and-builds is now also very attractive for private equity, rather than just doing one-off investments. David Fergusson: Is that something that’s on your plan? James Morris: Buying ability is always front of mind for private equity. I think about 80 percent of our portfolio have had some form of bolt-on acquisition. Obviously, it just depends on the circumstance and the business. David Fergusson: I have a question from the audience while we’re still on the subject of low-cost money. This is from Mike Powell from Woodside Capital. He’s asking, “Yes, we understand the value of low cost money, but how does historically low cost energy affect the M&A market?” Since it’s the underpinning certainly in your region and across most of all businesses that we’re engaged in some form. Your perspective on that? Richard Pulford: There’s reality in this. If you look at the break-even cost for oil for countries across the world, I think we’re below that for most of the developed Western economies, and that’s generally a bad thing. I think that the economic effects of that outweigh the benefits of manufacturers having lower energy input costs. I think with oil wherever we are today, somewhere between $30 and $40 a barrel, the overall economic effects in the West are net negative. Sure, there are positives for large consumers of electricity or power, but the overall economic effects are net negative. You just have to look at what’s happening in the oil and gas M&A market, which has gone [from] boom to restructuring in the space of six months. That’s generally a negative effect for companies whose cost of getting oil out of the ground is anywhere above $20, and that’s most of us. David Fergusson: We certainly have seen the sector take the headlines in our distressed and restructuring dialogue that’s happening on the US market side.

Presented by

17

Richard Pulford: Look what it’s done to the shale gas extraction market in the States. Look what it’s done to that market in the UK, which is basically chopped it off at the knees before it got going. That innovation, with low-cost oil, makes it not worth innovating in the same way. Therefore, it’s just bad news.


Brexit or Not? David Fergusson: The most popular question, not surprisingly, that I’m receiving from our viewers here today is that story that’s dominating British media and that is: Should the UK stay in the EU, or should it exit? We know where the Prime Minister firmly stands. His report over the weekend was followed up by an address of Parliament today. We also know, as of yesterday afternoon, exactly where the Mayor stands. I think we’d be remiss in not having a conversation about where this assembly of M&A market leaders stand. I don’t want to put you on the spot. I know that you have to consider both your personal and your professional opinion, but Robin, if I can start with you?

“If there was a vote out of Europe, this will have a disruptive effect on the legal system in the UK for at least three years, I think even longer. I think that’s bound to have an effect obviously on M&A.” - Robin Johnson

Robin Johnson: Yes, this is a personal opinion. It’s not the Eversheds opinion. I don’t actually know what the Eversheds official line is, to be perfectly honest. Without getting into the rights and wrongs – whether or not there should be a referendum or a Brexit – let’s be absolutely clear. If in fact the UK people do vote to leave Europe, you can’t just be in Europe one day and out of Europe the next day. The consequences of actually leaving Europe should not be underestimated in terms of the legal environment because for the last 30 or 40 years we have been a web of connections into Europe. If, in fact, we voted to leave Europe, we would have uncertainty for at least three years as we try to create a new state of the United Kingdom. People should not think that this is a decision that’s going to be made in June and forgotten about it in July. If there was a vote out of Europe, this will have a disruptive effect on the legal system Robin Johnson in the UK for at least three years. I think that’s bound to have an Eversheds effect obviously on M&A. Leaving aside the merits and demerits of the situation, the consequences of a vote out from a legal perspective are going to be very difficult. David Fergusson: I’m looking forward to seeing just how that message is disseminated before the vote in late June.

Presented by

Richard Pulford: I think there’s probably two ways of looking at this. First is, can there be life outside the EU for the UK? Of course there can. Can it be good for our economy? Of course it can. There are plenty of other countries in the world that are not part of the EU who are doing perfectly fine. To Robin’s point, the sheer complexity of extricating ourselves from the EU is one thing. What that brings is massive uncertainty and it will bring a lack of confidence in making decisions on the part of corporates or anyone looking to invest. Until you have absolute clarity on what the regulatory, legal, and commercial environment is going to be like, people will not make investment decisions. It’s going to introduce inertia into our economy, I would say, at least five years until the ramifications of it work their way through. As a person at my stage in life, I don’t want to see that five years of uncertainly and chaos.

18


David Fergusson: Great perspective. Thank you. David? David Evans: I completely agree. It’s going to have a negative short-term impact on M&A because, particularly overseas buyers want some certainly around what’s going to happen. I think the UK’s benefitted, particularly with US purchasers, from the perception that we’re the friendly landing point before they step off into that market of 500 million people.

“This country is adaptable and flexible. It is a capitalist country at heart, and it’s done very well. A socialist capitalist. I suppose it adapts. It will be fine.” - Anthony Dalwood

From a personal perspective, I’m a bit worried that we’ve let the genie out of the bottle. Almost regardless of the result, people will be unhappy. It’s going to become very polarizing. As we saw in Scotland, something that was supposed to be a “once-in-a-generation, settle it for 10 years” event, seems to have just emboldened people who lost the side of the argument to push yet again. From a personal perspective, I am quite worried about the effect it could have for the next five years. Anthony Dalwood: I can only reiterate. This country is adaptable and flexible. It is a capitalist country at heart and it’s done very well. A socialist capitalist. I suppose it adapts. It will be fine. If anything happens, it will be fine, but that period of interregnum and the capital flows, the risk, the pricing of risk, around capital flows into the UK will be substantial as a result. Inertia will be enormous during that period. Everybody involved in that will suffer temporarily. I am convinced it’ll be fine after that, but how long that time would be, is something that again I don’t necessarily want to live through whilst we try to do business day to day. David Fergusson: Ben, you get the last word. Ben Harrington: I agree with everybody here, actually. My personal opinion is I’d like for us to stay in the EU. I hope we do. David Fergusson: Thank you all. This is a particularly interesting time in M&A and I feel so fortunate to be a part of it and to be able to report on it, not only to our constituents here across Europe, but also to the United States. I thank you very much for joining me.

Conclusion

Presented by

19

This, the second in a series of The M&A Advisor Live Broadcasts -- “Growth Drivers and Deterrents – 2016 European M&A Outlook” -- focused on the outlook for M&A activity and whether the recent robust dealmaking cycle is nearing an end. Panelists had differing opinions on the staying power of the current cycle. Some saw new opportunities for private equity deals; others forecast a new period of strategic corporate buying activity. This summer’s UK referendum on “Brexit” weighed heavily on the forecasts. “Brexit” could negatively affect M&A activity for the next several years, according to some dealmakers. The consensus was that the UK and EU would survive in either case, but the consequences of a “Brexit” on M&A and the economy would be significant.


Live Web Broadcast Video To watch the exclusive M&A Advisor Live Broadcast on “Growth Drivers and Deterrents - 2016 European M&A Outlook,” click on the image:

Growth Drivers and Deterrents - 2016 European M&A Outlook

Presented by

20


Contributors’ Profiles

Anthony Dalwood CEO Gresham House

David Evans

Managing Director Alvarez & Marsal

David Fergusson President & Co CEO The M&A Advisor

21

Anthony (Tony) Dalwood is the CEO - Board and Investment Committee at Gresham House. He is an experienced investor and adviser to public and private equity businesses. Tony established SVG Investment Managers (a subsidiary of SVG Capital plc), acted as CEO and chairman of this entity, and launched Strategic Equity Capital plc. His previous appointments include CEO of SVG Investment Managers & Advisers (formerly Schroder Ventures (London) Limited), membership of the UK Investment Committee of UBS Phillips & Drew Fund Management (PDFM), Chair of Downing Active Management Investment Committee and the Board of Schroders Private Equity Funds. He is currently Chair of the Investment Committee and board member of the London Pensions Fund Authority, Director of Branton Capital Limited and JPMorgan Private Equity Limited plc.

David Evans is a Managing Director and European practice leader with Alvarez & Marsal’s Transaction Advisory practice in London. He brings over 20 years of experience in transaction service engagements providing buy side and sell side due diligence work for private equity sponsors and large corporates. Mr. Evans has worked with clients across a range of industries, and has deep industry expertise in TMT sector. Mr. Evans started his career with Arthur Andersen and Deloitte where he was a partner for 13 years – the last five years of which he spent running the transaction services team in London. At Deloitte Mr. Evans worked with private equity sponsors including Advent, Francisco Partners, HG Capital, KKR and Vista Equity Partners as well as with some of the firm’s largest listed clients including eOne, Liberty Global, Sky plc, Vodafone and WPP Group plc. He has worked on over 150 successful transactions in both the UK and internationally and spent 3 years in Deloitte’s New York office between 2003 and 2006. Mr. Evans earned an honors degree in law from Edinburgh University. A U.K. national, he is a member of the Institute of Chartered Accountants in England and Wales.

David A. Fergusson is the Co-Chief Executive Officer and President of The M&A Advisor, leading the firm’s global services operations of publishing, media, summit and connection services for a network of over 300,000 M&A, financing and restructuring professionals. Over his 30-year career, Mr. Fergusson has developed, acquired and managed over 40 product and service brands and companies across the North American and International markets. Prior to joining The M&A Advisor in 2010, he was a founding partner of Paradigm Partners, a small and mid cap venture capital management firm, which conducted over 25 acquisitions during Mr. Fergusson’s 15 year term. The former Managing Director of Graj + Gustavsen, Mr. Fergusson began his career in the development and management of leading sport, lifestyle and home product brands and provided brand marketing services to Fortune 500 corporations. As the curator and host of The M&A Advisor’s exclusive thought leadership summits, Mr. Fergusson engages regularly with leading stalwarts in the finance industry, media, and government and is a regular contributor to industry publications and media reporting.


Ben Harrington Editor Betaville

Robin Johnson

Partner Global M&A Practice Chair Eversheds

James Morris

Investment Director LDC

22

Ben Harrington is the Editor at Betaville. He is one of the leading Mergers & Acquisition reporters in Europe. He has been covering M&A, private equity and stock markets for the last decade for reputable publications including The Daily Telegraph, The Sunday Times and The Mail on Sunday. He has also written for The Wall Street Journal’s Money Beat blog, The Times, Private Equity News, Financial News and the Australian Financial Review. Ben is well-known in the investment banking, private equity and hedge fund industries for breaking important and accurate M&A stories, such as Carphone Warehouse’s £3.5 billion merger with Dixons Retail, which created Dixons Carphone is now listed in the FTSE 100 index. As a result, Ben has a unique insight into the M&A industry.

Robin Johnson is the Partner, Global M&A Practice Chair at Eversheds. He is Co Chair of Eversheds Cross Border M&A Team and runs a team across 30 jurisdictions of over 100 lawyers. He is also Sector Chair of the Diversified Industrial Sector Group. Mergermarket has placed Robin regularly in the top 10 of their Rainmaker leagues in the last 8 years. Legal Business in the UK recently voted Robin as one of the top ten M&A lawyers in the UK. In 2010-2011, Robin had a secondment to Parker Hannifin to assist in a major European restructure and in 2013 spent 4 months as Interim European and Asian GC for Archer Daniels Midland. In 2012, Robin spent 4 months researching and writing Eversheds award winning “M&A Blueprint : Inception to Integration” report. Robin has authored many articles including being published in the Baird Monthly M&A Monitor, International Financial Law Review, The Journal of Private Equity and the Metropolitan Corporate Counsel and European Private Equity Journal. He recently spoke on an ACC webcast on Top 10 Tips in M&A and Robin has also spoken on similar topics for the American Bar Association, National Directors’ Institute of Chicago and the Manufacturer’s Alliance. He was asked by Wall Street Journal to write an “opinion piece” in January 2010. He wrote the chapter on international joint ventures in the UK in the ABA International Joint Ventures the Transactional Guide for US Lawyers. Robin is a member of the ABA International M&A Task Force and a member of the Canadian Chamber of Commerce. Married with two children, he is a keen golfer and when he can, follows the English cricket team. He is a non-executive director of the University of Leeds, one of the largest universities in England and Wales. Robin is on the consulting editorial board for Lexis PLS for corporate M&A.

James Morris is an Investment Director at LDC. He is responsible for originating transactions for in the £2million - £100million equity range. James joined the London office of LDC in 2015 to focus on new business. Prior to this James was an Associate Director at Grant Thornton in a sponsor coverage role working with upper mid-market private equity houses. James has extensive experience of the private equity industry. He spent ten years at 3i in business development working across General Industrial and TMT sectors. His last role at 3i was Head of Research before joining Directorbank, a specialist private equity search consultancy, where he was responsible for the research function.


Richard Pulford

Managing Director and Head of Manchester Office DC Advisory

23

Richard Pulford is Managing Director at DC Advisory. I am responsible for transactions involving clients based in the North of England. I joined the company in 2008, drawn by the opportunity to establish and build a team whose main focus was on advising great Northern businesses. It is hugely important to our clients that we know the local markets and have regular, face to face contact with them. We are not simply putting in calls from an office two hundred miles away. I have worked with many of my clients for a number of years, some of them on multiple transactions, such as: York Mailing on an equity fundraising and a subsequent acquisition; and Cardtronics on three separate transactions (i-design, Cardpoint and Sunwin Services) in the space of two years. Clients recognise sound advice that is in their interests and they value the provision of honest advice, even if it differs from what they may have wanted to hear. Prior to DC I spent twelve years at PwC Corporate Finance, in both their Manchester and London offices. One of the highlights was being seconded to the Takeover Panel in 2002 and 2003. Gaining a deep insight into how a regulator applies a set of rules has allowed me to be a much better adviser on public situations.


About the Sponsor Merrill Corporation Merrill helps global companies secure success. From the start to end-to-end solutions – we simplify the complexity at every stage of the life cycle of regulated business communications. Whether you are looking at M&A or an IPO, filings with the SEC or other regulatory bodies, wanting a better way to manage contracts, IP and assets or looking to engage and communicate with customers – Merrill has the breadth and depth of services to unlock productivity. From implementing proven methodologies to forward-thinking technology. From the current regulatory landscape to what’s coming down the line. From day one to 24/7/365 expert access. Learn more by visiting www.merrillcorp.com

24


About the Publisher The M&A Advisor The M&A Advisor was founded in 1998 to offer insights and intelligence on M&A activities. Over the past eighteen years we have established a premier network of M&A, Turnaround and Finance professionals. Today we have the privilege of presenting, recognizing the achievements of and facilitating connections among between the industry’s top performers throughout the world with a comprehensive range of services. These include: M&A Advisor Summits and Forums. Exclusive gatherings of global “thought leaders.” M&A Market Intel. Comprehensive research, analysis and reporting on the industry. M&A.TV. Reporting on the key industry events and interviewing the newsmakers. M&A Advisor Awards. Recognizing and rewarding the excellence of the leading firms and professionals. M&A Connects. Advanced business development for key influencers and decision makers. M&A Deals. The global deal-making platform for M&A professionals. M&A Links. The industry’s largest network of M&A, financing and turnaround professionals.

Upcoming Events Emerging Leaders Summit - New York, NY - June 10, 2016 International Financial Forum - London, UK - October 12, 2016 M&A Advisor Summit - New York, NY - November 8-9, 2016 European Emerging Leaders Summit - London, UK - December 2, 2016

M&A Advisor Live Live Web Broadcast “2016 Outlook for US/UK M&A” - New York, NY - February 4, 2016 Live Web Broadcast “2016 European M&A Outlook” - London, UK - February 22, 2016 For additional information about The M&A Advisor’s leadership services, contact Liuda Pisareva at [email protected].

25