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NORWAY
Deal Maker of the Year Awards 2013
WINNER - TROND IVAR SKAR DEAL: CapMan sells Cardinal Foods to CapVest
NAME: Trond Ivar Skar COMPANY: Deloitte TEL: +47 90 74 66 25 EMAIL: tskar@deloitte.no WEBSITE: www.deloitte.no
DEAL OVERVIEW
CapMan’s disposal of Cardinal Foods in 2013 closed an exciting chapter in Cardinal Foods biography, similarly opened a new in a larger portfolio within Swedish giant Lantmannen. Established by CapMan as a buy and build case in 2005, the disposed entity represented a challenger to the agricultural cooperation Nortura on white meat and egg. With presence in three out of four national grocery chains, Cardinal Foods’ dedicated management group had built a market share in Norway of impressive c20% and c30% for white meat and egg, respectively.
Deloitte had discussed the asset with CapMan several times before the conclusion to test the market was made. Although the decision was CapMan’s own, it did not come as a surprise that Capman opt’ed for a full financial and tax due diligence as part of the sales process. While Cardinal Foods operates based on a long term strategy and with its original management, their business has characteristics that require thorough analysis and description. The lighter and less painful vendor assist approach, which has become increasingly used in the Norwegian market, was considered insufficient given the Company specifics, market characteristics and buyer universe.
Both the owner and company management recognized the value of a thorough deal preparation, and the selection of Deloitte as financial and tax vendor due diligence provider were made even before the selection of Corporate Finance advisor.
That being said, Nordea Markets as Corporate Finance advisor was well prepared, allowing for a fruitful discussion of required information. Analysing and articulating fundamental market growth in combination with solid operational and financial improvement was made as a joint effort between
company management, Nordea Markets and Deloitte. Having one set of robust financials for the teaser and information memorandum and again into the vendor due diligence is an important contributor to reduced deal risk.
Following strong and profitable growth, fuelled by both favourable consumer trends and retail preferences, Cardinal Foods had become an attractive asset. Although not unusual, it became evident that the vendor due diligence should serve the needs of both financial sponsors (and their lenders) and corporates.
The buyer group, i.e. the consortium between Lantmannen
(owning Kronfogel) and CapVest,
illustrates an interesting development in Nordic Private Equity with a partnering model between
BIO
Partner – Head of Deloitte Transaction Services - Norway Starting with 7 years of audit practice, Trond has focused on transactions and due diligence processes over the last 14 years, gaining substantial experience from a number of industries and types of transactions (buy-side, sell-side and listings) including complex cross-border and carve-outs.
Highly merited, among other heading the Real Estate Deal of the Year 2013 in Europe, advising Madison International Realty on their investment into the Statoil complex outside Oslo, Norway. That transaction was not only the second largest single asset transaction in the Norwegian market that year, but also the first in Norway to have acquisition financing available through a bond at closing.
The Norwegian transaction services department consist of 30+ dedicated professionals, M&A Tax included, representing the largest service line within Deloitte Financial Advisory, a group of 55+ transaction advisors in Norway advising in respect of equity, debt and partnerships (Public-Private-Partnership).
Private Equity and ambitious corporates searching alternative sources for growth funding. A similar development has been seen on other transactions involving Private Equity, where the sponsor more balanced co-invests with management or current owner.
Sell side services have been one of Deloitte’s growth areas over the last years. A pragmatic approach to client needs combined with a thorough understanding of the requirements from debt and equity providers has been welcomed in the market. The growth has resulted in the need for additional partner capacity, culminating in the recruitment of the ex-KPMG partners Jonathan Farnell and Are Skjoy effective from October 2013.