20 corporate finance


M&A activity – subdued but still very much alive


’Despite a difficult market we are continuing to see merger & acquisition activity from our clients who are strategically developing their businesses, making opportunistic purchases, or are able to command good prices for quality businesses on disposal,’ says Peter Vandervelde, head of corporate finance at RSM Tenon


Below are two examples of recently-completed deals, which illustrate the type of transactions we are currently seeing within the marketplace. We have started to see more of these deals with an international aspect, although the domestic market for consolidation plays, in the right sector, is strong.


The refinancing deal of Micheldever Tyres enabled them to continue their expansion strategy and acquire Tyreland. The refinancing deal was recently recognised as ’Deal of the Year’ (over £25 million) at The Business Magazine Thames Valley and Solent Deals Awards. This illustrates a typical ’UK buy and build acquisition’.


The disposal of Portsmouth- based manufacturer of plastic pharmaceutical packaging and medical devices Cope Allman Jaycare to Swedish injection moulder Nolato, was a key part of Nolato’s strategic expansion with the medical technology and pharmaceutical sector. This deal illustrates a disposal to an international acquirer which we have started to see more of in recent months.


Micheldever Tyres acquires Tyreland


Micheldever Tyres, the Hampshire based tyre retailer and wholesaler, acquired the Tyreland chain of 10 retail and wholesale tyre branches in Dorset, Hampshire and Wiltshire from the owner, Martyn James, for an undisclosed amount.


Following a management buyout in 2006 Micheldever Tyres is owned by Graphite Capital and management. It is the country’s largest supplier of replacement tyres, selling some six million tyres a year and is a major consolidator in the UK tyre industry.


The RSM Tenon transaction services team in Southampton, led by Nick Williams, corporate finance director,


www.businessmag.co.uk


RSM Tenon advised management from Cope Allman Jaycare on the MBO from Rexam in 2002 and the transformational acquisition of Jaycare from administration in 2008. A valuation project was carried out in 2010 followed by a strategic review which led to a disposal mandate commencing early in 2011.


The project attracted interest from both private equity and a range of international trade buyers. A deal with Nolato was agreed in principle early in 2012, followed by a period of due diligence.


Darren Miller, corporate finance director who led the deal for RSM Tenon, commented: “RSM Tenon is delighted to have been able to support the business throughout the past 10 years from the original MBO through to the sale and we are confident that the business will continue to flourish within the Nolato Group.“


Nick Williams


is the retained due diligence provider. It undertook financial and tax due diligence on Tyreland on behalf of Micheldever Tyres and its syndicate of banks, working closely with its retained legal advisers.


Williams commented on the deal: “We are very pleased to be able to support Micheldever Tyres with its consolidation strategy. Tyreland is an excellent business with a reputation for providing a high- quality service to its customers and will certainly complement Micheldever’s existing operations.“


Commenting on another successfully completed transaction, Jon Cowles, Micheldever Group’s finance director, observed: “I have worked with Nick for many years and the Tyreland transaction is another example of how he and his team add value through their understanding of our industry and my wider strategic goals.“


Cope Allman Jaycare acquired


by Nolato AB


Cope Allman Jaycare, which was established in 1958, has 270 employees at its plants in Portsmouth and Newcastle and has a number of major international pharmaceutical customers. Over recent years the company has


Darren Miller


firmly established itself as the UK’s leading manufacturer of rigid plastic packaging for the pharmaceutical sector as well as an innovative supplier of plastic medical devices.


In the year to December 31, 2011, Cope Allman Jaycare had sales of £26.4m and generated operating profit of £3.4m. Nolato bought the business from Cope Allman management, who will remain in the business. The transaction involves cash consideration of £16.6m, plus deferred consideration based on earnings up to and including the first quarter of 2014.


Nolato has been expanding rapidly over the past few years, with new plants in China and Hungary and an acquisition in the US. Nolato said the deal with Cope Allman Jaycare was part of its strategic expansion within medical technology and pharmaceuticals.


Christer Wahlquist, president of Nolato Medical, said: “This acquisition gives us a local presence in the UK, which is an important part of the global pharmaceutical industry. It also opens doors with a large number of leading international pharmaceutical companies which are existing customers of Cope Allman Jaycare.“


Working with RSM Tenon corporate finance


The team at RSM Tenon provides a total corporate finance solution for entrepreneurial business owners, ambitious management teams, corporates, investors and funders whether they are seeking to create or unlock shareholder value.


The team regularly advises on transactions between £1m and £100m in value, and has expertise gained from advising on transactions across a wide spectrum of industry sectors, both nationally and internationally through the RSM global network.


Details:


Peter Vandervelde Head of corporate finance 023-8064-6508 peter.vandervelde@rsmtenon.com


Nick Williams Corporate finance director 023-8064-6540 nick.williams@rsmtenon.com


Darren Miller Corporate finance director 023-8064-6501 darren.miller@rsmtenon.com


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – JUNE 2012


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