46 corporate finance


Plan ahead to maximise value and minimise risk


After a very strong 2013, the Reading-based corporate finance team at James Cowper is looking forward to an even better year ahead. Corporate finance partner Nick Rogers says over the past 12 months the number of deals completed year on year has more than doubled and the signs are very positive for 2014


“We have had an absolutely fantastic year with 17 deals since January and another three or four expected to be completed by December,” he said. “Some have been long-standing James Cowper clients, while others have come through contacts and introductions, which is very gratifying.”


He puts the firm’s success down to its “very effective and efficient” approach, reliable service and sound commercial advice.


James Cowper Corporate Finance has offices across the Thames Valley and Solent regions as well as in London.


The corporate finance team covers the whole of the region and is likely to expand in the new year. Sector specialisms include healthcare – for which it has completed five deals this year – marketing services, travel/tour operators, IT services and manufacturing.


“We’ve undertaken a wide breadth of activity with deals ranging from £1 million to £50m,” said Rogers. “We are as comfortable with deals at the £50m mark as we are with smaller ones, which we believe is a real differentiator for our business.


'Confidence is building and I think we can look forward with a much greater degree of certainty than we had 12 months ago'


“This year, we’ve raised several million pounds for a micro insurance business working in the UK and overseas, and handled a number of MBOs and MBIs. We’ve sold businesses to major corporations and completed several financial due diligence exercises for clients, as well as acting as reporting accountants in an AIM IPO.


“It is our range of work which I believe sets us apart, it means that when potential clients come to us, we won’t just take them down a particular pathway. We’ll look at the overall process and provide the expertise to ensure they attain the best possible outcome.”


The team works mainly with owner- www.businessmag.co.uk


managed businesses, but also with public companies and private equity houses.


Among its recent successes have been the sale of Basingstoke-based GTK (UK) a component manufacturer and distributor, to a management buyout team; and the acquisition of ISS Healthcare by City & County Healthcare.


Looking ahead to 2014, Rogers says the signs are encouraging.


“Confidence is building and I think we can look forward with a much greater degree of certainty than we had 12 months ago,” he said. “The improvements in the UK economy are allowing people to make more informed planning decisions, including transactions.


'Many foreign companies see the UK as a gateway into Europe and we are also seeing a return of US buyers and an emerging number of Chinese buyers'


“Two key enablers for transactions are very strong corporate balance sheets and the private equity houses having cash and looking for good opportunities. All that comes together and means there is a healthy environment for M&A and corporate finance activity.”


What is missing however, he says, is bank funding. Often vendors have to fund the gap themselves by lending back to the acquirer.


As a result, some deals have been taking longer because of the “uncertain” environment and a more cautious approach from buyers. Elsewhere though, others have been completed in as little as six weeks, one of which was the sale of local Thames Valley firm Eclipse Marketing Services to Stericycle.


Another change which Rogers says he has seen is in relation to earn-outs.


“Five years ago we might have seen 10% of the consideration based on an earn- out over six months, but now it might be 30% over three years as buyers want


THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER13/JANUARY14


to be sure of future performance,” he continued.


James Cowper prides itself on finding creative solutions, as Rogers explains: “When people go into the process, they want a deal to happen and it’s up to us to use our expertise to get them the best possible shape. We do that time and again.”


He says the market is also now seeing more interest from overseas buyers (particularly India) who are keen to invest in UK companies, often in the IT services, healthcare and manufacturing sectors.


“Many foreign companies see the UK as a gateway into Europe and we are also seeing a return of US buyers and an emerging number of Chinese buyers.


“This is a good time and our message to the market is to come and talk to us well ahead of any intended transaction in order that we can help maximise the value and minimise any risk,” he concluded.


Details: Nick Rogers 0118-98580261 nrogers@jamescowper.co.uk www.jamescowper.co.uk


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