40 corporate finance roundup
Herrington & Carmichael helps businesses acquire an advantage
A renewed appetite for equity deals across the Thames and Blackwater Valley regions is a sign of sustained confidence in the marketplace, according to legal firm Herrington & Carmichael, writes Bea Longworth
As recently as last year, organisations looking to acquire or be acquired were still extremely risk averse, with deals primarily focused around cash consideration. But according to Yavan Brar, head of corporate and commercial at Herrington & Carmichael, equity and deferred cash deals are once again becoming prevalent, fuelling merger and acquisition transactions and offering more options for those seeking to raise funding.
“Acquisitions are a large part of what my team does, although we also work in many other areas, including restructuring debt and fundraising,” says Brar. “Like the rest of the firm, we pride ourselves on building long- term relationships with our clients, as well as offering them a wealth of legal skills across the corporate and commercial spectrum. This approach is particularly important when we’re supporting an acquisition, since it’s such a key event in the development of any business.”
During 2014 Brar’s team has expanded to meet demand for its services. In October, Mark Chapman, who originally trained with Herrington & Carmichael and returned in 2012 after gaining in-house experience with Apple and Acromas, was made a partner in recognition of his outstanding work helping the firm to win blue-chip clients. Meanwhile, solicitor Jo Noddings has been spearheading Herrington & Carmichael’s continued growth in the field of legal advice to the healthcare sector.
Yavan Brar
Particularly for SMEs, Brar warns that too much caution in structuring equity deals can be as damaging as too little.
“We have a well-established client base among owner-managed businesses because they really appreciate the investment we make in relationships,” continues Brar. “However, it’s not just smaller organisations that are looking beyond a one-size-fits- all approach to legal matters. We’ve been successful in attracting larger organisations too, such as the UK’s largest family-owned
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“For businesses around the £20 million- £50m size, their ability to be responsive to the market is a key advantage over larger competitors. When people move beyond the financial terms in equity deals, it’s important they don’t loose that advantage by crippling their new business with high levels of decision-making criteria.”
From its offices in Wokingham and Camberley, Herrington & Carmichael is well positioned to appreciate the qualities that make the Thames and Blackwater Valleys
THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER14/JANUARY15
waste management company and a household name insurance company. It’s a real testament to our strength across the board.”
Businesses look to acquire and be bought for a range of reasons, from entering new sectors to providing an exit for owner managers approaching retirement. “I’m really encouraged to see equity deals driving acquisitions again, but it’s important for anyone looking at this option to get the right advice before moving forward,” says Brar.
such economic powerhouses. Regional specialisms in financial services and IT, exceptional infrastructure and high numbers of owner-managed enterprises all add up to a dynamic business environment. For organisations in the region seeking to grow through acquisition, good advice is key to maximising their opportunity.
“It’s never too early to start preparing to be sold,” continues Brar. “Having a clean company that stands up to due diligence will put you in a strong negotiating position and help the process go smoothly, particularly if your business relies on core rights, such as intellectual property rights, a few key contracts or operates in a heavily regulated environment, such as financial services or healthcare.
“Conversely, for those seeking to buy, a clear acquisition model is vital. Putting a deal template in place can be extremely helpful, even before you start identifying targets. If you know what return you want, the sort of funding you’ll use and the kind of business you’re looking for at a very early stage, you’re in a great position to be successful.”
While there’s no shortage of investors looking for strong prospects, Brar urges businesses not to overlook opportunities closer to home. “We’ve handled a number of MBOs where second-tier management has surprised directors by initiating deals which have gone on to be highly positive for everyone involved. Owner-managers who’ve been in a role for a long period may never have given much consideration to delegation or succession planning. In fact, you’re likely to get greater value from those who know your business than an outside investor, so an MBO can be a very attractive option, as can structure and employee share schemes.”
With all signs pointing to sustained recovery in 2015, it’s clear that Herrington & Carmichael’s legal expertise will be instrumental in helping businesses in its region to forge a bright future.
Details: Yavan Brar 0118-9774045
yavan.brar@
herrington-carmichael.com www.herrington-carmichael.com
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