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Business Risky


With corporate M&A on the up, EMC Corporate Finance has closed transactions in excess of £100 million over the past 12 months. Hunter Ruthven finds out more


A


s the market looks to respond to the stop-start situation that continues to hinder progress,


Nik Askaroff, chief executive officer of management and corporate finance consultancy EMC, says that more risk needs to be taken to ensure that solid businesses have the chance to prosper.


The south-east England-based firm has done just that and posted a record year on the back of a number of big-ticket deals. Despite being in a fairly tight economy, EMC has grown its team and has opened a major new office in Brighton that is set to be its new centre for western and central Sussex.


‘The end of 2010 and beginning of 2011 was fairly positive, but by the mid-point of this year activity started to slow down again,’ Askaroff explains.


He believes that while most M&A practitioners appear to be doing well, the worry of what is going to happen tomorrow still looms large in the rear-view mirror. The return of private equity is a development that Askaroff explains has had a positive impact on valuations, with increased competition meaning that


56 Mergers & Acquisitions


EMC has been able to push the button on a number of deals with healthy values. One such deal was the sale of Genesis Forwarding Group, acquired by Australia’s Toll Group in a A$150 million (£87 million) double deal involving WT Sea Air Group. In other transactions, EMC has been involved with the education sector in a deal relating to a Sussex private school, as well as a £24 million fundraising for a medical project.


In a new turn of events, Askaroff says that, at EMC’s end of the spectrum, private investors are now looking to corporate M&A as an alternative to poor returns from the bank and a crumbling property market.


He adds that private equity is also looking to bolster its own portfolio companies through buy-and-build strategies, with the bolt-ons being acquired either extending the portfolio life of the business or getting them to an exit more quickly by adding much-needed revenues and profits.


TIME TO USE RESERVES With private equity active, Askaroff is hopeful that trade buyers will begin to utilise the cash reserves that they have been sitting on while weathering the storm. The management buy-out work with which EMC has been involved has come on the back of a number of owner-managers believing that they can cash in their stake now and still work for three to four more years, a situation that Askaroff reveals is music to private equity investors’ ears. Looking at growth sectors, Askaroff feels


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