4 On the Market
and has 6.5 million customers, who hold current accounts, credit cards and mortgages.
Waste management firm Biffa has been placed on the market by its private equity owners, due to a fall in waste levels during the recession and its £1 billion debts. Its owners, Montagu Private Equity and Global Infrastructure Partners, are also believed to be considering selling the business very
cheaply in exchange for a share in a future merger synergy. Based in High Wycombe, Biffa has a 6,300-strong workforce, and reported revenues of £850 million for the year ending March 2012. Its client base includes J Sainsbury and local councils. Biffa is also shouldering gross debts of £1 billion and is due a covenant test in June. The waste management industry has been affected by a decline in consumer spending, which has brought waste volumes down, and the effects of tax hikes for firms still relying on landfill have also reduced demand. An increased focus towards recycling has pushed waste management firms to adapt. Biffa, however, is still reliant on industrial waste and some industry experts have said they believe it has not moved over to recycling fast enough, despite having purchased recycling firm Greenstar in 2010 to boost its own recycling services. Biffa’s rivals are considered to be highly likely to look into a takeover, and include Veolia, Pennon, Waste Recycling Group and Sita.
Scottish bus firm FirstGroup has placed part of its operations on the market with the aim of generating £100 million in cash. The move is part of a strategy to
“significantly reposition" its business after announcing falling profits due to a decrease in passenger numbers in Scotland and the North of England. Its operations in these areas of the UK account for 60 per cent of its overall turnover and a third of its operating profits. The parts of the group that are to be sold off were not revealed, but analysts estimate that they bring in between £130 million and £140 million for FirstGroup, representing 11.7 per cent of its total £1.2 billion of sales. FirstGroup operates 8,000 buses across 40 locations in the UK. Its stronger areas in the South have reported a 3.3 per cent increase in passenger numbers, with a 0.4 per cent rise in Scotland and North England. With cash-strapped customers still deciding to stay at home rather than visit the shops in the weaker performing regions, FirstGroup says neither cost cuts or fare hikes would counterbalance the effects of higher petrol bills and lower government subsidies,
Scotsman.com reported. FirstGroup began its disposals last year with the sale of its German unit to Marwyn European Transport for £4.8 million, while this year Stagecoach is due to shortly take over its North Devon bus arm for £2.8
million.In separate news, FirstGroup is in the bidding process to operate the Thameslink, Great Western and Essex Thameside rail franchises.
Engineering firm Mouchel has brought in Goldman Sachs to advise on a
possible sale as it looks to tackle its £90 million debt pile. Options to be considered include a debt-for-equity swap - which would wipe out existing shareholders and pass control over to Mouchel’s lenders - a new share issue to raise funds and a break-
up and sale. The Sunday Times reported that Glynn Thomas, previously the corporate development director at VT Group, has been brought in to assist Mouchel’s chief executive, Grant Rumbles, with strategy. During his time at VT Mr Thomas had failed in an attempt to purchase Mouchel. It is believed he will be acting as adviser to Mr Rumbles on a potential sale. In 2011 London-based Mouchel entered rescue talks with its main bank lenders – RBS, Lloyds and Barclays – after a large profit downgrade following the discovery of a deep hole in its accounts. Mouchel had miscalculated its profits on a project by £4.3 million after an actuarial error on its pensions. In addition to this, it was uncovered that a further £4.3 million needed to be put to one side after aggressive accounting on some of its contracts came to light. Mouchel has offices in the UK, Ireland, the Middle East and Africa. It is market leading in water, public health, power, highways and structural engineering.
The struggling greetings card retailer, Birthdays, has been put on the market by its owner Clinton Cards in an effort to return to profit. Ernst & Young has been brought in
to manage the sale process of the 141-store Birthdays chain, as part of Clinton’s new chief executive’s aim to improve the group’s performance, The Independent reported. The group had made losses of £10.66 million for the year ending 31 July 2011. Clinton’s has been working to shrink the Birthdays chain over the past few years. In 2009 it bought back 196 Birthday’s shops out of administration, and also put the chain through a liquidation process in the Republic of Ireland in 2011. Clinton’s new chief executive is Darcy Willson-Rymer, the former UK managing director of coffee giant Starbucks. He kicked off with a strategic review shortly after starting at his new post. The review of the business is due to be finished in late April, a spokesman for Clinton’s told The Independent. “This is critical for the successful turnaround of the business and by necessity looks at every part of the group, including both Clintons and Birthdays,” he added. Birthdays’ accounts showed a loss of £8.6m for 2010-2011. Recent figures revealed that like-for-like sales fell by 2.7 per cent during the five weeks to 1 January 2012. In comparison, Clinton's sales increased by 0.8 per cent for the same period.
Emap is mulling the sale of its magazines and conferences businesses as it considers a restructuring process. No decisions have yet been made
and the potential sale would not signify a break up of the company. Emap is mainly focused on data and events, and its publishing business is comparatively small. The company started a strategic review on its operations close to the time when its new chief executive, Duncan Painter, joined at the end of last year. Since then it has moved its largest conferences, including World Retail Congress, into its successful exhibitions business. The smaller magazine-related conferences have been transferred into Inform, the arm that publishes trade magazines Retail Week, Drapers and Nursing Times amongst others. Apax and Guardian Media Group purchased Emap in 2008 for £1 billion. Its hefty debt pile and the adverse effects of the recession on trading - leading to falling advertising revenues and subscriptions - have hit the business-to-business publisher. Mr Painter told The Telegraph that the company is aiming for
BUSINESS SALE REPORT - THE UK’S LEADING SOURCE OF INFORMATION ON COMPANIES FOR SALE
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