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since June 2007 when the credit crunch CUSTOMER LOYALTY
began. The sales have realised a total of In the new world, it seems, loyalty will
£1.2 billion at an average multiple of 2.7 be rewarded, and customers seeking
times original cost. more from their banks than a quick loan
Last year saw a clutch of high-value are likely to be treated more favourably.
transactions by Lloyds TSB Corporate Sterling insists the normal rules of
Markets. In the Midlands alone there business still apply, although with a
SIGN OF THE TIMES were four in excess of £100 million, and little more rigour than may have been
One sure indication that dealmaking is one – the acquisition of Somerfield by the the case in the past.
back on the agenda will be changes at the Co-operative Group – topped £2 billion. “Credit criteria are being reviewed
top of large corporations. Simon Sterling, relationship director more stringently, and in the larger
“We haven’t seen it yet, but we will with Lloyds TSB Corporate in the corporate market – firms with a turnover
soon,” says Dunne. As old CEOs go out
of the door, they take with them the
cherished projects to which they have
“What we do know is that there comes a point when
emotional attachments.
the PE firms decide it’s time to go shopping again.
Incoming executives have different
priorities and tend towards the disposal of
We’re not at that stage yet, and the rosy scenario
non-core activities as a quick fix. Indeed,
would be that it comes in the second quarter”
tough conditions or not, some hardy
investors are simply getting on with the
business at hand. Midlands, also uses the word of between £75 million and £100 million
Among the acquisitions and disposals “challenging” to describe the coming 12 – there is probably a more realistic
announced recently is one completed by months, during which he believes expectation around the price of debt,”
HgCapital last month. The European sector- liquidity in the wider banking market he says.
focused private equity investor disposed of its will remain tight. “We are very happy to engage with
payment business, Orbiscom, to MasterCard However, despite the increased cost prospective new customers who are
for $100 million (£67 million). of debt, he says that for customers willing to offer us a rounded relationship.
HgCapital has funds under management offering well-rounded and well-founded “But it clearly has to work both
of €2 billion, and the transaction brought relationships it will not be excessively ways. It’s not just about debt
to 16 the number of exits it has achieved expensive or rigid. transactions.” ■
Mergers & Acquisitions 41
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