Informed Leadership M-Brain is a global information services company with offices in 12 different countries. We spoke to COO, Joakim Nyberg,about winning the award for Excellence in Information Services for the M-Brain Acquisition of a stake in Global Intelligence Alliance Group.
Embracing Excellence BCL Limited is a mining and smelting company whose main shareholders are the Botswana Government, holding 94% and 6% for Norilsk Nickel. We were recently In contact with the company, which won the award for Excellence in Mining & Smelting for the Norilsk Nickel Sale of African operations to BCL Ltd.
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M Brain Award for Excellence in Information Services for the M-Brain Acquisition of a stake in Global Intelligence Alliance Group
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BCL LTD Award for Excellence in Mining & Smelting for the Norilsk Nickel Sale of African operations to BCL Ltd
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MAINSTAY MEDICAL Mainstay Medical International IPO
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12 MAINSTAY MEDICAL De Tiger Holdings’ IPO of DT Asia Investments Limited Welcome to the 2014 Deal Feed Top Transactions Awards. As the recovery of the global economy continues apace, the 2014 Deal Feed Top Transactions Awards are paying tribute to the deals and dealmakers that, over the past 12 months, have made major contributions to the economic landscape in their region and beyond. These prestigious and highly sought after awards highlight the major deals and investments that have made considerable waves throughout the financial industry during 2014, and turn the spotlight on all those involved in steering each deal to its successful conclusion, from accountants and lawyers, to advisors and top-tier management figures. But not just anyone can walk away with one of these awards. Our dedicated and highly experienced judging panel leave no stone unturned as they delve into the inner workings of each deal, rigorously researching each nominee, their sector, industry and even their competition in an effort to ensure that only the most deserving take home the prize. All winners are named purely on merit (there’s no buying your way to one of our awards) meaning that each and every successful nominee can be rightly proud of their achievement and rest safe in the knowledge that they are keeping company with some of the best-performing and most highly regarded firms from around the globe. So, to find out more about the businesses that have truly excelled and proven themselves to be leading the pack in the world of transactions, read on. Mark Toon, Editor mark.toon@ai-globalmedia.com
16 CHINA BANK China Bank Acquisition of Plantersbank 20 GAW CAPITAL Gaw Capital Partners led Acquisition of London’s Exchange Tower from BlackRock 24 RESONANCE ASSET MANAGEMENT Resonance Asset Management LLP Acquires Fortrie Renewables LLP 26 FIVE.AM five:am Acquired by PZ Cussons 28 BATHSTORE bathstore mbo 30 NCS CHAMELEON NCS Software Ltd Acquires Chameleon Technology Pty Ltd 32 CAP ENERGY Cap Energy PLC Acquisition of Djiffere Licence 34 STRABAG STRABAG Real Estate Acquisition of the Astoria Office-Commercial Project in Warsaw in October 2014 36 WYLESS The Changing Face of Wyless 38 NEXSTIM Nexstim IPO 40 SYMPHONY How Good Partnerships Promote Success 42 OANDO PLC Oando Plc Acquires Assets from ConocoPhillips 44 APCERA Ericsson Acquires Majority Stake in Apcera www.dealfeed-intl.com | 3
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Award for Excellence in Information Services for the M-Brain Acquisition of stake in Global Intelligence Alliance Group Transaction
Name: Joakim Nyberg, COO Finland Email: joakim.nyberg@m-brain.com Address: M-Brain Oy, 00057 M-BRAIN, FINLAND Website: www.m-brain.com Telephone: +358 20 7737 600
M-Brain is a global information services company with offices in 12 different countries. We recently spoke to COO, Joakim Nyberg, after they won the award for Excellence in Information Services for the M-Brain Acquisition of a stake in Global Intelligence Alliance Group. M-Brain was started in 2002 by my mother Marjukka Nyberg as a service company focusing specifically on the then new area of digital media monitoring. Social media monitoring was in its very infancy, but we were specialists in delivering editorial media content in digital form. Our services were geared towards PR specialists and departments. M-Brain enjoyed a steady growth year-on-year. I came on board full-time in 2010 as Marketing Manager and in 2011 we made our first acquisition, the Finnish operations of media monitoring company, Cision. A year later we acquired the Finland-based industry monitoring company, Esmerk, giving us a presence in Sweden, UK, Russia, Germany, France and Malaysia. One year later we acquired the rest of Finnish social media analytics company Whitevector, of which we already owned about 20%. Last year we acquired Global Intelligence Alliance Group, further widening our geographical reach to China, Singapore and the Americas, as well as broadening our service offering to include advisory and consultation services. Today, as a result of the recent acquisition, we are a global information, technology and consultation services company. We help our clients navigate the turbulent and ever expanding business environment by offering crucial external business information and advising on efficient management and utilization. Through this we turn information into actionable insights for daily decision making and strategic planning. Following this latest transaction, M-Brain is clearly distinguishing itself from the competition. We offer both the technology and methodologies to monitor the external business environments of our clients as well as offer analysis services, turning this data into insight. We complement this with consulting services, advising our clients on what implications these insights have on their business and how they should plan their strategy accordingly. The acquisition has allowed us to complete the transformation of our offering into a full-fledged external business information gathering, analytics and advisory suite, covering the whole spectrum of our customers’ external information needs when it comes to making well-informed business decisions. Our services are based on a unique combination of our own proprietary big data technology, which harvests, selects and filters the relevant - and only relevant - content from all over the world for our clients, enriched by human intelligence. Our 400+ analysts worldwide add value to our clients by providing them with insight based on information from over 70 languages. Our solutions are also geared towards serving varying business, needs regardless of function or industry segment. We help business leaders in many sectors of their businesses. We help them stay aware of all developments in their business environment (monitoring). We help them understand what these developments mean for them (intelligence) and, based on the information we analyze, we help them decide on their optimal strategy for success (advisory). The reasons why we believe customers choose us, and how we have established a positive presence in the industry, are based on our processes and methodologies. Big data technology plays an important role in our business. M-Brain’s technological IPR, the core engine and the advanced visual solutions are the result of in-house R&D, which specializes in BI-relevant purification, enhancement, clustering and semantic enrichment of data. Combining this with over 20 years of experience in market intelligence best practices makes us the perfect partner for companies wanting to succeed in a world ruled by information. We also tailor our more top-tier solutions based on our client’s needs, from local to global enterprises and governmental institutions, which outlines our scalable solutions process. Our global resources are highlighted, as we are a leading European company with offices in 12 countries and a partner network spanning the globe.
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We will ensure that our business is always at the forefront of any changes or developments within the industry by staying constantly aware any developments and by being ahead of the curve in our technological development. Over the next 12 months, we definitely see the industry consolidation continuing and we will be an active player in that game.
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Email: JMolosankwe@BCL.BW
Award for Excellence in Mining & Smelting for the Norilsk Nickel Sale of African operations to BCL Ltd BCL Limited is a Botswana-based mining and smelting company that is wholly owned by the Government of the Republic of Botswana. We recently contacted the company to talk about their Award for Excellence in Mining & Smelting for the Norilsk Nickel Sale of African operations to BCL Ltd.
The Company began its operations in August 1956 with a meeting arranged by John Buchunan, Chairman of Minerals Separation Limited between Tshekedi Khama, Regent of the Bangwato Tribe in the Bechuanaland Protectorate and Sir Ronald Prain, Chairman of Roan Selection Trust(RST). An agreement between the parties, signed in June 1959 and subsequently ratified by the British House of Lords, formalised the mining operations. This agreement with RST Exploration Limited, a subsidiary of Roan Selection Trust formed Bamangwato Concessions Limited to operate the mining of copper and nickel discovered in the Selebi Area in 1963. In pursuit of its forward looking corporate strategy, BCL has undertaken a number of initiatives such as cleaning its balance sheet to ensure that the company is not only debt free but is positioned to derive the shareholder value. The Government of the Republic of Botswana became 100% shareholder of BCL Limited after successfully negotiating with then co-shareholders, the Russian based Norilsk Nickel International, to relinquish its 6% shareholding in BCL by mutual consent. The move is deemed a necessary step to give the government effective control of the company, particularly in view of its drive to diversify the local economy of the Selebi Phikwe region, whose main shareholders are the Botswana Government. BCL is the largest employer in Botswana based in one town. The entire workforce numbers around 4,200 and the company prides itself on sound people management practices, providing employee amenities such as accommodation, recreational facilities and opportunities for self development in individual careers. Core Values Respect and Recognition We value innovation, embrace diversity and recognise individual contribution and the potential in each one of our people. Excellence We are passionate about what we do and will do it right the first time around. Continuous improvement and ‘peak to peak’ performance is the norm rather than the exception. Proactive We are committed to creating the future as we want it to be, not what is given to us to adapt to. We will emphasise prevention of problems not just problem solving. Adaptability Because continuous improvement is a way of life at BCL, we are highly adaptable to rapid change. We will effectively position our company and work processes as dictated by our cyclic industry. Dependability Our commitment is our word, whatever it takes. We will timeously and proactively advise our customers/stakeholders whenever we cannot meet our commitments.
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Mainstay Medical International IPO Peter Crosby is Chief Executive Officer of Mainstay Medical. In April 2014, the company completed an Initial Public Offering in order to raise funds to conduct Clinical Trials and to submit an application for CE Mark as it moves toward commercialization of its potentially ground-breaking medical device for sufferers of chronic low back pain.
Mainstay is an Irish medical device company with operations in Ireland, Australia and the United States. The Company is focused on the development and commercialisation of ReActiv8, an innovative implantable neurostimulation device designed to treat people with Chronic Low Back Pain (CLBP) by helping to restore control to the muscles that stabilise the lumbar spine. There are other neurostimulation devices that operate by masking pain (e.g: spinal cord stimulators). Company: Mainstay Medical International plc Name: Peter Crosby Email: peter@mainstay-medical.com Web: www.mainstay-medical.com Address: Clonmel House, Forster Way, Swords, Co Dublin, Ireland Phone: +353 (1) 897 0250
Peter Crosby tells us more about Mainstay and its focus areas. The company was founded in 2008 in Minnesota, USA, he begins. Its entrepreneurial team comprises of dedicated scientists, engineers and clinical experts highly experienced in developing and commercialising technologies addressing unmet clinical needs. The firm specialises in partnering with scientists and clinical experts to deliver innovative therapies for the large underserved population of people with debilitating chronic low back pain. More about Peter Crosby Peter Crosby has been a Board member of the company since he was appointed Chief Executive Officer of Mainstay Medical in mid-2009. Mr Crosby was instrumental in founding the company and raising the 2010 and 2012 financing rounds. He is an internationally experienced medical device executive who has been Chief Executive Officer or Chairman of seven medical device companies (public and private) in four countries. Mr Crosby has contributed to the development and introduction to the global markets of dozens of medical devices over a career spanning more than 30 years. After working for five years in a hospital environment, Mr Crosby entered the industry as one of the first three employees of Cochlear, and continued his career with executive roles in many more companies. He has direct experience in active implantable medical devices, including cardiac pacemakers and defibrillators (Telectronics Pacing Systems), cochlear implants (Cochlear), left ventricular assist devices (Ventracor), Neuromodulation (Mainstay Medical), ultrasound (Ausonics, NeoVision), software (Cardicomm Solutions), and in-vitro diagnostics (First Medical, and Ischemia Technologies,). He has also raised capital for many medical device companies, and has been directly involved in the sale of several companies. Mr Crosby graduated with a Bachelor of Electrical Engineering and a Masters in Engineering Science (Biomedical Engineering) from the University of Melbourne, Australia. He is a named inventor on more than 25 patents and patent applications, primarily in the field of biomedical engineering. About Chronic Low Back Pain Low back pain affects a large number of working adults all around the world. Chronic low back pain is a major health problem of the modern world and can affect anyone at any age, but is most common between the ages of 35 and 55. Approximately two thirds of people will have low back pain sometime during their life and each year 15%- 45% of the population will experience an episode of low back pain. 80 to 90% of people with low back pain recover within 90 days, but after that, recovery is slow and uncertain with approximately 7% of affected people ending up with chronic low back pain. Very few cases of low back pain have a cause identifiable with medical imaging (MRI, CT or X-Ray), and the remainder (about 85%) are referred to as non-specific low back pain. Chronic Low Back Pain incurs a significant economic burden. Estimates of the total direct and indirect cost of back pain are up to 1.7% of GDP in key markets. Back pain is the most common reason for years lived with disability worldwide and the largest single cause for absence from work, accounting for about 12% of all lost working days. About 80% of the health care and social costs related to low back pain are for the 10% with chronic pain and disability. Recovery from chronic low back pain is limited For individuals with back pain for more than three months, studies have shown that recovery is slow and uncertain. Fewer than half of those individuals disabled for longer than six months return to work and, after two years of absence from work, the return-to-work rate is close to zero. A new solution is needed. Mainstay Medical is dedicated to helping the millions of people with chronic low back pain by developing ReActiv8 which is designed to facilitate their return to an active and productive life. Importantly, helping people with chronic low back pain return to work will help reduce the associated global economic burden of health care, lost work days and productivity.
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Mr Crosby adds. You are not alone if your life is affected by low back pain. Approximately two thirds of people suffer from low back pain at some time during their life. In eight or nine out of ten people back pain resolves within 3 months. However, for approximately 7% back pain becomes a chronic condition, and this is where ReActiv8 may come in. About ReActiv8 and the Science Behind It Many studies show that restoration of muscle control is an important step in the treatment of chronic low back pain. ReActiv8 is a small implanted device which stimulates the nerves responsible for contracting the multifidus, the key muscles that stabilise the lower back. ReActiv8 sessions are delivered twice a day for about 30 minutes. During the sessions stimulation from ReActiv8 causes the multifidus muscle to cycle between contraction and relaxation. The patient is always in control of the stimulation session via a handheld wireless remote control. Over time, the stimulated contractions may help the brain and body learn how to better control the muscles. Restoration of muscle control and spine stabilisation allows the body to recover from chronic low back pain. The merit of a device based therapy for multifidus motor control reactivation was demonstrated in a European multi-centre study. Headline results of this feasibility study were first presented at the 11th world congress of the International Neuromodulation Society in Berlin in June 2013. 74% reported clinically important improvement in back pain (VAS) 63% reported clinically important reduction in disability (ODI) 85% reported an improvement in quality of life (EQ-5D) and none reported a decrease 45% of patients on disability leave resumed work by 3 months. The results from the feasibility study were used in the development of the ReActiv8 and the design of clinical studies to support global regulatory approvals and adoption of ReActiv8 into clinical practice. The Deal Recently, Mainstay Medical conducted a capital raise through an initial public offering (IPO) in April of 2014, followed by a listing on Euronext Paris and the Enterprise Securities Market (ESM) of the Irish Stock Exchange. Existing investors participated in the IPO, including Sofinnova Partners, Fountain Healthcare Partners, Capricorn Ventures, Seventure, and Medtronic, and new investors from Europe and the US provided additional capital. The company raised approximately ₏18.8M. We were delighted with the very positive response from institutional and individual investors who recognised that Mainstay Medical’s unique and innovative approach to treating chronic low back pain, in addition to meeting a major clinical need, also offered an attractive investment opportunity, Peter says. The company engaged two investment banks (Kempen and Societe Generale) as well as a Co-lead Manager and an ESM Advisor (Davy). The process was similar to any IPO in that it involved the generation of a prospectus, publication, road show, and various ancillary activities associated with the listing, says Peter. What was unusual, however, was the need to accommodate multiple corporate legal systems and governance regimes. Most countries are exerting pressure on health care costs, and any new device, drug or therapy must be able to demonstrate cost effectiveness as well as clinical effectiveness. In addition, the regulatory environment always presents challenges in bringing any new medical device to market. Speaking of the strategic rationale behind the IPO, Mr Crosby continues: Mainstay decided to raise capital through an IPO because it gives access to a different pool of capital from that available to private companies. Mainstay is a development stage medical device company, and as such requires
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capital to grow and expand. The company was founded in USA (Minneapolis), and the first financing round (2010) was with venture capital. The second financing round (2012) was also with venture capital, primarily European, and the company moved its corporate headquarters to Dublin upon the close of the financing. The latest financing (2014) was an IPO on ESM and Euronext Paris. Therefore, each financing round represented a new array of challenges and opportunities, but all reflecting the Company’s continuing objective to grow. Mainstay is now using funds from the IPO to conduct Clinical Trials and to submit an application for CE Mark approval as it moves toward commercialization of ReActiv8, including the ongoing trials of ReActiv8 in Australia and Europe. The clinical trials of ReActiv8 started in March 2014, and several sites in Australia and Europe continue to actively enroll subjects The purpose of the clinical trial is to investigate ReActiv8 as a treatment for adults with debilitating Chronic Low Back Pain who have few other treatment options. The funds help the company progress towards regulatory approvals for its device in the US and Europe, as Peter adds: Mainstay believes that CE mark regulatory approval for ReActiv8 will be achieved by the end of 2015, although as is typically the case with development programs in the medical device industry, there is no guarantee that this will be achieved. The Company is also preparing to make a submission to start the proposed US clinical trial of ReActiv8 under an IDE to the FDA in 2015. The deal was highly unusual, and Peter tell us why. We were the first Irish company to ever list on Euronext Paris, he enthuses. The first Irish company to do a dual listing on ESM and Euronext Paris, and also the first company to list on Euronext from outside one of Euronext’ s home countries. How s that for impressive? But not only did this transaction present many firsts for the industry, it also presented many challenges in terms of alignment of the various corporate legal systems and exchange rules that are sometimes incompatible or even mutually exclusive. This deal required perseverance, imagination, creativity, and a hard working team, explains Peter. When available, ReActiv8 has the potential to change the lives of the millions of people who suffer from chronic low back pain.
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Corporate History 2008 Dan Sachs MD filed a patent on the idea that led to ReActiv8 Mainstay Medical, Inc. (MMI) founded in Minneapolis 2009 Peter Crosby recruited as CEO in early 2009 to build the Group (being the Company and its subsidiaries), its team and develop ReActiv8 for commercialisation 2010 $6.1m capital raised in Series A Financing round in July 2010 led by Sofinnova Partners plus capital from Twin Cities Angels Additional patent applications filed 2011 First patient enrolled in the Feasibility Study, a study designed and sponsored by the Group to investigate the therapeutic approach on which ReActiv8 is based 2012 Mainstay Medical Limited (MML) becomes the holding company of the Group. $20m capital raised in Series B Financing round in September 2012 led by Fountain Healthcare Partners, with additional capital from Sofinnova Partners, Medtronic, Capricorn Venture Partners, Seventure Partners and Twin Cities Angels. Group HQ relocated to Dublin, Ireland. MML US, Inc. (MMLUS) created as a subsidiary of MML. Last patient enrolled in the Feasibility Study in October. 2013 Appointment of Oern Stuge MD as independent Chairman of the Board. Core U.S. Patent 8,428,728 issued in April 2013, with claims directed to a neuromuscular electrical stimulation system for improving stability of a patients lumbar spine. Summary results of the Feasibility Study presented at the meeting of the International Neuromodulation Society (INS) in Berlin in June 2013. Summary results of the Feasibility Study presented at the Neuromodulation Society of the United Kingdom and Ireland, in Oxford in September 2013. Awarded Gold Electrode Award for Most Promising Startup by Neurotech Reports (October 2013). U.S. Patent 8,606,358 B2 issued December 2013 as a continuation of U.S. Patent 8,428,728. Development of the key implanted elements of ReActiv8, proprietary Implantable Stimulation Leads and an Implantable Pulse Generator, completed in 2013. Submission to ethics committee to start international multicentre clinical trial of ReActiv8.Mainstay Medical (Australia) Pty. Limited (MMA) created as a subsidiary of Mainstay Medical Limited. Appointment of David Brabazon as new independent director based in Ireland. 2014 The Company was incorporated and registered in Ireland on 17 February 2014 as a public company and became the holding company of the Group on 3 April 2014 in accordance with the 2014 Corporate Reorganisation. Approval received from ethics committee to begin the international multi-centre clinical trial of ReActiv8 at first sites in Australia and commencement of patient recruitment. First subjects enrolled in international multi-centre clinical trial of ReActiv8 Completion of an initial public offering on Euronext Paris and the ESM of the Irish Stock Exchange. Listing under ticker symbol MSTY. Clinical trial extended to Europe and by November 2014, over 25 subjects implanted with ReActiv8. Caution: ReActiv8 is an Investigational Device, and not commercially available anywhere in the world.�
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De Tiger Holdings’ IPO of DT Asia Investments Limited Mr. Stephen Cannon is CEO and Board Member of DT Asia Investments Limited, a NASDAQ-listed [NASDAQ: CADTU] acquisition vehicle, sponsored by the De Tiger Group of Hong Kong.
DT Asia Investments Limited Company: DT Asia Investments Limited Name: Stephen Cannon Email: steve@DTAsiaInvest.com
De Tiger Group (“De Tiger”) was founded by the Ng family of Hong Kong, and is focused on private investments in Asia with a specific emphasis on Greater China. On September 30, 2014 De Tiger successfully completed the flotation of DT Asia Investments Limited (“DT Asia”) on NASDAQ, with a US$69 million IPO [NASDAQ: CADTU]. DT Asia has 18 months to complete the acquisition of an operating business in China or Asia, via effectively a “reverse merger”. DT Asia is headed by Mr. Stephen Cannon, a Wall Street veteran with deep China and SPAC experience, and is bolstered by several board members with lengthy and successful investment track records in China. EarlyBirdCapital, Inc was the lead underwriter for the U.S. IPO, which priced on September 30, 2014. Mr. Cannon, DT Asia’s CEO and Board Member, stated: “DT Asia is currently searching for a private Chinese company with more than US$30 million of 2014 earnings, audited to a certain degree, with an ‘offshore’ holding company, in need of approximately US$69 million of cash and interested in a reverse-merger to become publicly-listed on NASDAQ in the US. We are not limited by any specific industries, except those that are restricted from foreign ownership. We are interested most in quality management teams with high growth businesses that are building strong domestic and international brands and a strategic benefit from a US public listing. We are happy to speak to anyone with such interests and can be reached at steve@DTAsiaInvest.com.” What Are SPACs? DT Asia is an investment company commonly referred to as a Special Purpose Acquisition Company, or “SPAC”. SPACs are formed for the sole purpose of doing an IPO to raise capital, and then “acquiring” an operating business by either a cash purchase of assets or (more commonly) a share exchange (reverse-merger). Institutional investors are attracted to SPACs because their IPO purchase price (plus additional cash from the sponsor) are placed into a trust that invests solely in risk-free US treasuries. Once the acquisition target is announced, then investors have the option to (i) retain their equity ownership in the post-merger publicly-listed company, or instead (ii) receive their proportionate cash in the trust. Some investors consider their investment in the SPAC IPO as an “alternative to holding cash”, because they can receive the US treasuries yield earned by the trust, plus the extra funds from the sponsor. Prior to the Global Financial Crisis in 2008, SPACs had grown popular as an alternative method for private companies to become public, via a reverse-merger with a SPAC, and avoid market uncertainties of a traditional IPO. Several highprofile global financial leaders, including private equity firms and investment banks, raised SPACs for this purpose. SPACs grew in number and size with several hundred SPACs raised and up to almost $1 billion in size. Prior to the Global Financial Crisis, approximately a dozen China-focused SPACs were raised between 2005 to 2008. DT Asia’s successful 2014 IPO was effectively the first true China-focused SPAC in the last 6 years, and reopened this market. Prior to DT Asia, Mr. Cannon was a co-founder of one of the last China-focused SPACs raised prior to the Global Financial Crisis, Hambrecht Asia Acquisition Corp, or “HAAC”. HAAC successfully completed its reversemerger acquisition during the difficult post-Global Financial Crisis period in early 2010, with the target SGOCO Group [NASDAQ: SGOC]. DT Asia’s Board Member Dr. Foelan Wong commented: “SPACs provide excellent opportunities for private companies to transform into publicly listed companies, with greater certainty and control over the process. SPACs can offer a variety of solutions for target companies from raising needed capital, to possible monetization for earlier investors, to increasing their industry stature by becoming publicly traded Company with a public acquisition currency. Our experience is that larger Chinese companies, in terms of pre-IPO valuations, have had greater access to public listings overseas. In addition, companies in high-tech and capital-intensive industries, namely technology, financials, and bio-technology, are among those Chinese industries better represented by overseas listings. We have also found that stock markets which value businesses more fully and fairly based on their individual historical success and future outlooks, are more desired by Chinese managements and owners. These higher quality companies, seek to avoid capital markets without these characteristics, and which correlate with greater under-pricing of IPOs. In this regard, we believe the SPAC can provide a fair platform for high quality companies, and we are happy to speak to anyone with such interests.” DT Asia’s IPO Terms DT Asia sold 6,860,063 units (including first closing and overallotment exercise) to the public at an IPO price of US$10.00 per unit. In addition, De Tiger (the “Sponsor”) along with the underwriter EarlyBirdCapital, completed an
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additional US$4,551,534 of concurrent private placement purchases from the Company. The SPAC then placed $10.20 per unit into a trust – Consisting of the US$68,600,630 of IPO proceeds plus an additional US$1,372,013 from the private placements. The remainder of the private placement was used for formation, offering expenses and working capital.
Prior to the IPO and the concurrent private placements, the SPAC initially issued founder shares to the Sponsor, management and Board Members equal in amount to 20%, assuming the IPO shares equalled 80% of the Company (thus excluding the private placement securities in the calculation). The origin of this structure was designed for the SPAC to mimic the carried-interest incentive structure of traditional private equity funds.
The unit sold in the IPO consists of: (i) one (1) ordinary share; (ii) one warrant to acquire one-half (1/2) of an ordinary share; and (iii) one right to receive one-tenth (1/10) of an ordinary share. The units, ordinary shares, warrants and rights all trade separately on Nasdaq under the symbols “CADTU”, “CADT,” “CADTW” and “CADTR,” respectively.
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DT Asia’s Board Member Mr. Jason Wong commented: “The SPAC is a unique form of listing. First, the SPAC is created by a team of senior private equity managers and investment bankers to complete an initial public offering; becoming a “pure cash” listed company. Next, the SPAC team searches for companies to acquire through a reverse merger, after which the target company receives the cash previously raised in the SPAC’s IPO. Overall, the target company is able to achieve a lower cost for both the public listing and raising capital, as well as certainty for existing shareholders to immediately enjoying the benefits of conversion of their private ownership into that of a listed company. “SPACs should be regarded as an equity fund that is already listed on a stock market. This is different from a general private equity fund, in that the SPAC has already solved, in advance, the issues of raising lower-cost public capital and providing existing investors with an exit strategy. Moreover, a SPAC can offer a greater variety of options and opportunities for overseas listings of Chinese companies. We look forward to having the opportunity to assist red-chip Chinese companies, in particular those with outstanding management teams, high profitability and growth potentials in their overseas listings.” Professional Team EarlyBirdCapital, Inc. acted as sole book-running manager for the offering and Aegis Capital Corp. and I-Bankers Securities, Inc. acted as co-managers for the offering. EarlyBirdCapital is widely credited as the inventors of the current SPAC structure and the market leader in SPAC IPOs in the U.S. Ellenoff Grossman & Schole LLP acted as U.S. legal counsel, while Ogier acted as British Virgin Islands legal counsel, to the Company and Graubard Miller acted as legal counsel to the underwriters. De Tiger’s CEO, Vincent Ng, commented: “De Tiger is very excited about the prospects of the SPAC structure to address limitations that private Chinese companies face in attempting to expand internationally, including public listings overseas. We are confident that we have assembled the best team possible and have the support of the leading professional firms in the SPAC market.” DT ASIA Management and Selected Board Members include: Mr. Stephen Cannon - CEO, Principal Financial Officer and Board Member China Focus – Mr Cannon has been a partner at boutique merchant banking firms focused on China since 2010. Mr. Cannon began focusing on China in 2005, when he established the Shanghai office for the U.S. Investment Bank, WR Hambrecht + Co. Over the next 4 years, he built the firm’s China business into the #2 most active U.S. Investment Bank underwriting mid-cap SME Chinese offering in the US. SPAC Experience – While at WR Hambrecht, he was involved in several China-focused SPAC transactions as M&A advisor and underwriter. In 2008, he was a co-founder and initial CFO of the Hambrecht Asia Acquisition Corp (“HAAC”) SPAC. Mr. Cannon identified the SPAC’s ultimate acquisition target (SGOCO Group Limited [NASDAQ: SGOC]) and negotiated a successful transaction with that company. Additionally in 2008, Mr. Cannon was a co-founder and Chief Financial Officer of Ruslan Acquisition Corp, a Russiafocused SPAC that received Euronext approval for a $300 million IPO, with committed lead underwriters of Credit Suisse and Morgan Stanley. The IPO was indefinitely postponed after the Russian invasion of George in Aug 2008. Wall Street Experience – Mr. Cannon began his investment banking career in 1991 at Salomon Brothers. He continued corporate finance at Smith Barney, Donaldson Lufkin & Jenrette (1994 to 2000), and then ABN-Amro Securities. His career has spanned several industry and product groups, including M&A, high yield financings, leveraged buy-outs and restructurings, public equity and debt, private equity and debt. Dr. Foelan Wong - Board Member Investment Experience -- Since October 2013, Mr. Wong has served as a Managing Director of Great Wall Pan Asia International Investment Company Limited, a wholly-owned subsidiary of China Great Wall Asset Management Corporation Limited (GWAM). GWAM is one of the four largest state-owned asset management companies in China. From 2012 to 2013, Mr. Wong was a Director of ABCI Asset Management Limited, a subsidiary of Agricultural Bank of China Limited (HKSE: 1288) (ABC). ABC is one of the four largest commercial banks in China. Previously, he was a Managing Director of HEC Group Ltd., as well as an investment manager for three Hong Kong publicly-listed companies. He has also served as Senior Executive of Total Securities (HK) Limited and Qi Yuan Asset Management (H.K.) Limited, both of which are well known regional investment boutiques in Hong Kong. Previously, he also served as a Manager of Okasan International (Asia) Limited, a subsidiary of Okasan Securities Group (Tokyo: 8609). Mr. Jason Kon Man Wong - Board Member Investment Experience -- Since 2013, Mr. Wong has served as a board member of Whiz Partners Asia Ltd., an investment advisory company focused on assisting Japanese companies expanding in Asia. Previously since 2000, he served as a board member of Fortune Capital Group Ltd., an investment company. From 1993 to 2000, he was a financial consultant of Transpac Capital Limited, one of the largest and oldest private equity funds and venture capital funds in Asia. From 1992 to 1993, Mr. Wong was an auditor for Ernst & Young CPA (Hong Kong), and for Clay & Co. (US) from 1989 to 1992. Public Board Roles -- Mr. Wong has served as a director of several publicly listed companies, including: Group Sense International Limited (HKSE: 601); Neo-Neon Holdings Limited (HKSE: 1868); Polyard Petroleum International Group Limited (HKSE: 8011); China Shen Zhou Mining & Resources, Inc. (ASE: SHZ).
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Mr. Hai Wang - Board Member Investment Experience - Mr. Wang founded Top (HK) Investment & Development Ltd. in 2009, and has been the Company’s Executive Director and led all of its investments since its inception. The company manages a private equity fund focused on emerging market sectors involving the TMT industry, green energy, Bio Tech., and financial industry sectors.
Operating Experience - From 2008 to 2009, he was the Chief Operating Officer of MTV China, one of the largest subsidiaries of MTV, the world’s largest music television network and owned by Viacom. Previously from 2006 to 2008, he was the Senior Vice President of PPLIVE, one of the largest point-to-point (P2P) technology based online video companies in China. Previously, Mr. Wang was the Head of Strategy and Investment Development of BESTV in China and also a Director of Digital Media Investment, an IPTV, interactive media and mobile TV entity based in Austria. Previously, he served as Chief of Production for Zhejiang Television in Hangzhou, China.
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China Bank Acquisition of Plantersbank Developing a vibrant SME sector together Spouses Angelo and Lolita Hizon listened to their guests talk about a new development that will give them access to more and improved financing opportunities for their business. The Hizons own Pampanga’s Best, one the thriving small and medium enterprises (SMEs) in the Philippines that produces the number one brand of the national breakfast favorite, tocino, a cured meat with a unique salty-sweet taste. The couple’s guests that afternoon of June 9, 2014 were Carlos Borromeo, the president of the bank that has been helping them expand their business, Planters Development Bank (Plantersbank), with Alberto Emilio Ramos, the president of China Bank Savings (CBS), who visited them at their home in San Fernando, Pampanga to personally inform them of Plantersbank’s eventual merger with CBS and what it means for Pampanga’s Best and the other SMEs in the country.
Company: China Banking Corporation Name: Ricardo R. Chua, Senior Executive Vice President and Chief Operating Officer Email: rrchua@chinabank.ph Phone: +63 2 8855403 Fax: +63 2 892-0226
SMEs play a major role in emerging markets, creating jobs, fostering economic activity and social stability, and contributing to the development of a dynamic private sector. Small and medium enterprises, like the Hizon family business, are the lifeblood of the Philippine economy. As of 2012, there were almost 945,000 business enterprises operating in the Philippines, 99% of which were micro, small, and medium in scale which contributed 65% of the total jobs generated by all types of business establishments that year. China Banking Corporation (China Bank), founded in 1920 by entrepreneurs, to serve the needs of entrepreneurs, understands that access to financial services is vital in developing a vibrant SME sector. With a rich history of helping start-up businessmen grow their businesses, the Bank knows all too well that the most successful entrepreneurs start out small, that they are more reliant than big firms on domestic demand and bank lending, that they need all the support they can get to realize their full potential and in turn, boost the country’s economic growth. In a strategic move to sharpen its retail banking focus, China Bank acquired in 2007 the oldest savings bank in the country, Manila Bank, and re-launched it as China Bank Savings. Now, with the acquisition in January 2014 of Plantersbank, the country’s leading bank in SME finance, and its eventual merger with CBS, China Bank is helping create an enabling business environment for SMEs. “Plantersbank has supported us all these years and I am glad that it will be able to help us even more with the backing and resources of China Bank. This is a welcome development for us and we intend to continue the relationship with CBS,” said Mrs. Hizon to the chief executives who came all the way from Makati City, some 78 km. away from San Fernando, Pampanga. The right decision For China Bank President and CEO Ricardo Chua, everything was right about the acquisition of Plantersbank—the timing, the reason, and the outcome. “China Bank and Plantersbank share the same strong commitment to helping entrepreneurs start and grow their businesses. We are excited by the opportunities to combine the strong legacy of both institutions to provide greater support to SMEs in the country,” said Chua. In May 2013, China Bank was invited to bid for the majority stake and eventual takeover of Plantersbank. Four months later, on September 18, the Memorandum of Agreement was signed, which calls for the acquisition by China Bank of 100% of Plantersbank shares for P1.863 billion, followed by the signing of the Share Purchase Agreement on December 18. And as the world settled to its usual cadence after the holiday revelry, Plantersbank officially became a part of the China Bank Group with the financial close of the deal on January 15, 2014. As of December 31, 2013, Plantersbank had over P50 billion in assets and 78 branches. With the acquisition, China Bank closed 2013 with P467 billion in assets, becoming the fifth largest universal bank in the country. Its end-2013 branch network reached 445—295 for China Bank, 72 for CBS, 78 for Plantersbank—bringing China Bank to the ranks of the top five banks with the largest branch networks in the country. All hands on deck The real work has begun—merging Plantersbank with CBS, with the latter as the surviving bank. It’s an enormous task that the employees of all three banks are happy to do, for the benefit of the clients and all the other stakeholders, including themselves. China Bank welcomed the Plantersbank officers and staff, ensuring that they will continue to have a role in the combined group. “The growth opportunities and corresponding challenges are enormous, which is why we need everybody in this bigger journey,” said Chua. Absorbing the Plantersbank employees, which numbered almost 1,300 at end-2013, was part of the plan from the onset. The acquisition meant a significant business expansion that required a bigger manpower; in addition, China Bank does need a lot of people. The Bank has accelerated its recruitment program in step with the branch expansion program that began in 2006. And as it gears up to meet the challenges of a fast changing financial environment, more of the right people are needed, of which Plantersbank has plenty.
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A few days after the MOA signing, an announcement was made to Plantersbank employees that their job is secure. The chairmen of both banks, Mr. Hans Sy for China Bank and Ambassador Jesus Tambunting for Plantersbank, assured everyone that “we’re going to need all of you. We need your help and want you to work with us.” China Bank ended 2013 with a combined human capital of almost 6,900 officers and staff. For Mr. Chua, people management is crucial to a successful merger. “More than anything, with all the work we have to do, it’s the people that matters the most.” Business as usual Signs that say “Plantersbank is now a China Bank subsidiary” are prominently displayed at all Plantersbank branches, but in the meantime, it’s business as usual. While Plantersbank continues to operate as a separate entity within the China Bank Group until the merger is finalized by next year, and preparing business plans and budgets for 2015 and beyond under the combined CBS/ Plantersbank “new bank”, the employees of all three banks work together towards achieving their 2014 targets and ensuring that clients are not be affected by the ongoing integration activities.
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To ensure a seamless merger, a 52-member Integration Committee composed of China Bank, CBS, and Plantersbank officials, was set-up. The committee had its first briefing on January 23, a week after the conclusion of the deal, to pin down the teams responsible for the different functional areas and the line-up of tasks and priorities at various phases of the integration. The committee and the various task forces meet regularly to plan, coordinate, and discuss their progress. “This acquisition is a major undertaking. Plantersbank is not a small bank and there are a lot of moving pieces. At the same time, there are compliance and regulatory issues that we are resolving one at a time,” said Chua. The Bangko Sentral ng Pilipinas had earlier given the go signal for China Bank to proceed with the acquisition of Plantersbank and its eventual merger with CBS. China Bank expects to get the approval of the Philippine Stock Exchange next year. “We are One” With the battle cry “We are One”, the presidents of CBS and Plantersbank have been going around the countryside since May with a small group of their key executives to visit clients and personally convey a clear message of solidarity and a continued commitment to building a stronger platform for SME finance. A series of cocktails was likewise hosted for Plantersbank’s SME clients to celebrate the forthcoming merger and the resulting bigger, better, and stronger “new bank.” In a relaxed setting and over good food and wine, CBS and Plantersbank officials mingled and socialized with clients, sharing with them significant developments about the merger and assuring them of the same warm, personalized service to which they have been accustomed. “It’s not enough that we put up or send out the necessary notices about the merger,” said Chua. “If we want our clients to continue to be one with us in our journey to become a bigger and better bank, we have to personally invite them.” The Hizon couple of Pampanga’s Best appreciated the visit by Ramos and Borromeo and made them feel truly valued by their bank, as did the other clients. For employees, Project Pipeline was launched in June, a mechanism to support the marketing efforts of CBS and Plantersbank. A series of product briefings were conducted to familiarize the sales groups of both banks with their respective SME and consumer loan products and to guide them in identifying primary target markets. Ramos and Borromeo rallied the sales team—branch managers, account officers, and lending officers nationwide—to work together as one not just to drive revenues, but more importantly, to effectively support customers’ strategic goals. “Our message is clear, ‘we are one’, and we are enjoining everyone—our people, our clients, and our shareholders—to look forward to the future with renewed sense of optimism that we are standing on more solid ground. What we hope to achieve is an outcome where the whole will be greater than the sum of the parts, and where every member of the China Bank group will be ideally positioned to contribute in achieving our business goals of doubling our assets, net income and shareholder value in the next five years, and upholding our commitment to our clients that their success is our business,” said Chua.
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Gaw Capital Partners led Acquisition of London’s Exchange Tower from BlackRock Christina Gaw is Managing Principal and Head of Capital Markets at GAW Capital Partners. Christina speaks to Acquisition International about the company and, in particular, a landmark deal which took place earlier this year.
Company: Gaw Capital Partners Name: Christina Gaw Email: info@gawcapital.com Web: gawcapital.com
Company Profile Gaw Capital Partners is a uniquely positioned private equity fund management company that focuses in real estate markets in greater China and other high barrier-to-entry markets globally. Christina continues: “Specialising in adding strategic value to under-utilised real estate through redesign and repositioning, the firm’s investments span the entire spectrum of real estate sectors, including residential development, commercial offices, retail malls, serviced apartments, and hotels. “Gaw Capital Partners runs an integrated business model with its own in-house asset management operating platforms in retail, hospitality and property development, and affiliates with Downtown Properties to bring in asset management capacity in the US.” Gaw Capital Partners currently manages four real estate funds targeting the Greater China and Asia Pacific region, while Gaw Capital Partners USA is providing services for separate account direct investment and fund management in the US and UK markets. Gaw Capital Partners has raised equity in excess of USD$4.0 billion since 2005 and currently commands assets of USD$ 8.6 billion under management as of the second quarter of 2014. Christina Gaw joined in 2008 as Managing Principal and Head of Capital Markets in time for further growth of the company. Christina possessed 16 years of investment banking experience with Goldman Sachs and UBS as Managing Director, with a career in Equities and Alternative Assets Advisory business where she led regional teams covering global institutional clients. At Gaw, aside from her main role in capital raising for multiple products, she also leads corporate marketing and capital markets division of Gaw Capital and work closely with our limited partners in all areas. Corporate Responsibility Christina explains more about the firm’s corporate responsibility policy. “Gaw Capital Partners strives to incorporate our corporate responsibilities in every aspect of our work,” she begins. “We commit to assess and address the concerns of the firm’s stakeholders, based on our broad understanding as a member of society and as an employer. We partner with DNV GL, a top classification and certification body and we share the belief for a safe and sustainable future. DNV GL reviews our projects and accordingly makes recommendations to make sure all projects are in line with the interests of the society.” Social: “Human capital is one of our core assets and we strive to make sure employees are treated equally and respectfully. We will establish labor and social policy in compliance to globally accepted standards, regarding child / young workers in all sites, working hours, wages and benefits, social insurance, sanitary requirements and equality of treatment.” Environment: “The increasing awareness of environment issues has resulted in a fast-changing regulatory landscape and we are committed to manage environmental risks and opportunities. It is our objective that it be embedded in its principle and management practices. In particular, we have established formal procedures to assess risk related to historical use of land, waste management and environmental parameters.” Health and Safety: “We establish health policies to make sure that employees’ physical well-being are properly protected. We periodically assess health risks on and off sites, train and brief staff on site safety to make sure employees are prepared for emergency situations.” Company History Co-founders Goodwin Gaw and Kenneth Gaw have extensive experience in real estate management and investment in North America and Asia prior to the founding of Gaw Capital Partners. In 1995, Goodwin took the opportunity to acquire the bankrupted Hollywood Roosevelt Hotel in Los Angles, and consequently founded Downtown Properties. Downtown Properties is responsible for the acquisition and management of property investments in the United States with Goodwin serving as Managing Principal of the firm currently. Under
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his direction, the portfolio extended to California, New York, Georgia and Hawaii, including 70,000 square meters of carrier hotel space, 2.5 million sq ft of office buildings, hotels of over 1,000 rooms, two 18-hole championship golf courses, and a ski resort. Goodwin’s interest in re-positioning distressed heritage properties reflects in Downtown Properties’ portfolio. These included the renovation of the iconic Hollywood Roosevelt Hotel in Los Angeles and conversion of over 456,000 square feet of empty historical buildings into hip residential lofts in downtown Los Angeles including the acclaimed Douglas Building. Other heritage building conversions include award-winning One Bunker Hill Building, 818 W. 7th Street Building and Bradbury Building also in downtown Los Angeles. In 1994, Kenneth joined Pioneer Global Group Limited (listed on the Hong Kong Stock Exchange) as Executive Director and was appointed Managing Director in 1999. In late 1999, Kenneth and his family re-strategized the operation direction and led the partial privatization of the Group’s banking and shipping assets as well as its US real estate portfolio. Today the company is primarily focused on real estate and hotel investments in Hong Kong, Macau, China, and Southeast Asia. Notable transactions with Pioneer Global Group in recent years included acquisition and repositioning of the Pullman Hotel G Pattaya and Pullman Hotel G Bangkok, Thailand; AIA Tower in Macau; Global Gateway Hong Kong, 68 Yee Woo Street, Club Lusitano building, and Kowloon City Plaza in Hong Kong. In 2005, Kenneth and Goodwin initiated and co-founded Gaw Capital Partners (formerly known as Gateway Capital), a real estate private equity firm focusing on Greater China and other high-entry-barrier markets.
Humbert Pang was appointed as advisory consultant to the then newly-founded Gaw Capital Partners in July 2005 prior to becoming Managing Principal and Head of China in 2006. Prior to GCP, Humbert worked for international property firm Healey & Baker / Cushman & Wakefield in London before joining Savills China as Director and founding Head of China Investment for more than 10 years. While being Executive Director of Shanghai Hotel Investments Ltd. and Shanghai Lixing Hotels Ltd., Humbert was involved in private equity investments, pre-IPO PRC real estate company investments, and many other acquisition transactions in China. The Deal In September of this year, BlackRock completed the sale of Exchange Tower to a group of Asian investors led by Gaw Capital Partners for £191million, equating to £395 per square foot on September 29, 2014. Gaw Capital Partners acts as the advisor and co-investor in this deal for Korean Teachers’ Credit Union and a pool of other Asian investors. Acquired by BlackRock Europe Property Fund III in 2010, Exchange Tower comprises 490,000 square feet of office accommodation over 16 floors. BlackRock undertook a comprehensive refurbishment of common parts and completed a turnkey refurbishment on behalf of the anchor tenant, which now occupies over half of the building. As a result occupancy has improved to 98% from 73% at acquisition. The transaction was structured as a forward sale to Gaw Capital and was agreed in April this year, in advance of completion of the works.
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Commenting on the sale, Chris McCormack, Director at BlackRock Real Estate in the UK, said: “The spread between prime and non-prime real estate across London continues to provide opportunities to generate returns for institutional investors. We are pleased to have delivered on our original business plan and achieved a significant total return during the four-year investment hold period.”
It is the fifth acquisition in London led by Gaw Capital Partners on behalf of its Asian clients and is its ninth separate account direct investment since 2010. Other notable transactions in London include Vintners’ Place in London in 2012, the Lloyd’s Building in London in 2013 and Waterside House in Paddington London in 2013.
“By upgrading the facilities to give the space an ultra-modern look and feel, we have been able to attract a number of high profile tenants, as well as securing interest from long-term capital buyers such as Gaw Capital.”
The Future “This London acquisition builds on the success we had advising the purchase of the Lloyd’s of London Building as well as Waterside House in Paddington,” said Christina Gaw. “There is definitely a growing demand from Asian institutional investors in safe commercial and residential real estate purchases abroad.”
BlackRock Real Estate is the dedicated real estate investment group within BlackRock and invests in strategies across the risk and return spectrum, providing access to all major property types. The business manages over $24 billion of private and public real estate equity and debt on behalf of investors worldwide in 17 offices across 11 countries in Asia-Pacific, Europe and the US. Investment structures include commingled funds, co-investments, joint ventures and customised separate accounts. Gaw Capital Partners acts as the advisor and co-investor in this deal for Korean Teachers’ Credit Union and a pool of other Asian investors. It is the fifth acquisition in London led by Gaw Capital Partners on behalf of its Asian clients and is its ninth separate account direct investment since 2010. Other notable transactions in London include Vintners’ Place in London in 2012, the Lloyd’s Building in London in 2013 and Waterside House in Paddington London in 2013.
Christina embellishes on what she believes are the key elements of competing a successful transaction such as this. “Cross-border investment flows from Asia into real estate in the United States, Europe and other developed markets have been accelerating in recent years. The key for a successful overseas investment lies in the asset management capability and relationship management in both local and overseas markets. The proven track record of Gaw Capital Partners demonstrates its ability to bridge the culture, expectation, resources and talent between East and West.”
Goodwin Gaw, Managing Principal and Chairman of Gaw Capital Partners, said: “As an active player in the real estate market in greater China and Asia Pacific, Gaw Capital Partners is seeing more opportunities to assist Asian Investors going overseas. London is one of the key global gateway cities with high liquidity. The combination of attractive yield, trophy quality asset, and attractive long term debt, makes London a particularly compelling market for core real estate investments.”
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Address: 1 Tudor Street, London EC4Y 0AH Tel: +44 20 7832 0900 Email: admin@resonancellp.com Web: www.resonancellp.com
Resonance Asset Management LLP Acquires Fortrie Renewables LLP We caught up with Francesca Collins, Investment Associate at Resonance Asset Management, to find out how the firm’s recent acquisition of Fortrie Renewables LLP will help to consolidate operating wind farms in the UK.
Please tell us a little about Resonance Asset Management. Resonance Asset Management is an alternative asset management firm focused on originating, distributing and managing real asset investment funds for institutional investors. Our mission is to deploy capital in a manner that makes a tangible contribution to the economy as well as generating attractive risk-adjusted returns for our investors. We invest in long term, cash-generative real asset investments that deliver yield and diversification valuable to institutional investors. Our areas of focus include alternative and conventional energy, water and waste treatment, environmental and agricultural assets. The firm currently manages c.US$160m of investor assets. How would you describe the current business environment in your region? The current environment offers our investors a range of attractive real asset investment opportunities. This primarily driven by banks withdrawing from lending, growth in our target industries and our investors’ desire for long-term capital. Fill us in on the basics of the deal in question. In June 2014, Resonance British Wind Energy Income Limited, our onshore wind Fund, acquired Fortrie Renewables LLP, from Duncan Green Energy, a partnership that develops wind farms through Muirden Energy. Fortrie Renewables LLP holds the assets that comprise Newton of Fortire Wind Farm, a 6.9MW wind farm in Aberdeenshire. It consists of three 2.3MW Enercon E70 turbines. The Fund acquired the wind farm without external debt. The freehold of the land that the turbines are associated on was also sold to the Fund. How about the deal’s strategic aims – why did it take place and what do you hope it will achieve? In 2011 the Manager identified an opportunity to consolidate operating wind farms in the UK. There is a large pool of onshore wind assets, with over eight billion pounds invested onshore, but there are few organised capital pools to provide exits. Many wind farm developers need an exit to move forward and to continue to develop new projects but it has been difficult for them to recycle their capital. While utilities and a few private equity investors have been known to acquire larger wind assets, there are fewer buyers for small to medium sized assets such as Newton of Fortrie. Resonance British Wind Energy Income holds wind assets for income for institutional investors. Most developers, however, build wind farms to sell on and achieve a capital gain to build more projects, not to hold for the longer term. In 2013, Duncan Green Energy sold Strath of Brydock to Resonance. The proceeds of this sale were used to build Newton of Fortrie. Now that Fortrie has been sold, Muirden has the capital to continue developing wind assets and Resonance has an income-developing asset in a superb windy location. Based on past operating history and electricity generation from the site, the Manager believes this asset will deliver investors an unlevered lifetime IRR within the Fund’s target return range of 8-10% per annum. Talk us through the deal process. Who was involved and what needed to be achieved for the deal to be a success? Nick Wood, Francesca Collins and Orlando Hilton led the investment for Resonance. Pinsent Masons, Glasgow, acted as legal advisor to Resonance and its funds. Wind Prospect provided technical due diligence and advice. High quality technical due diligence was vital in understanding the grid constraints and the potential adverse affects on the turbines and their generation. Close co-operation between the technical and legal teams were needed in order to ensure that risks were mitigated as much as possible. Did the deal present any challenges, and how were they overcome? Due to limited local grid capacity, the site was constrained to 50KW peak export when the asset was sold. Many UK renewable projects are affected by limited grid capacity, especially in rural areas where grid-strengthening works are necessary. Although the grid constraint was lifted in October 2014, the vendors were keen to sell the wind farm sooner to recycle the capital into their development pipeline.
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When Resonance acquired the asset, the exact date that the wind farm was able to export at full capacity was unknown although discussions with local electricity network operators suggested it might be October 2014. The deal had to be structured to allow for this uncertainty and to compensate for that fact that the asset would not initially be delivering meaningful income to the Fund. Resonance was able to negotiate a deal structure with the vendor that mitigated these challenges. It was decided that a deferred consideration component would be payable when the wind was able to fully export at full capacity. In the meantime, revenue from any generation was shared between the seller and the Fund between completion and when the wind farm received the full power export connection. Had there been any delays in the grid improvement and being able to export at full capacity, Resonance had assumed loss of the corresponding revenue per month which would have been subtracted from the deferred consideration. In the valuation, the Manager had assumed effectively zero generation until the full connection until October 2014. This meant that the asset was still correctly valued to achieve its target return.
Resonance recognized the vendors need to sell the asset quickly yet also appreciated the quality and generation potential of the wind farm. In the past, wind farm sales in the UK have been delayed while developers are forced to wait for their wind farms to be fully exporting in order to proceed with a sale. Resonance, however, could engage the flexibility afforded to them through as a small business and execute on the deal despite the initial lack of clarity on revenue. Was the current business climate conducive to a problem-free deal? Is it harder or easier than it previously has been to complete a deal of this nature? Whether or not it is harder or easier to complete on an onshore wind deal is a question of the flexibility and open-mindedness of the Manager. It is harder for larger asset managers and utilities that cannot move so quickly to accommodate the needs of small local developers and their unique assets. On the other hand, smaller investment firms may not always have the bandwidth and expertise to process the legal documentation needed to structure such a deal with its risks. It has become more difficult to obtain bank loans with long maturities required by many renewables projects with commercial banks facing capital and liquidity constraints. The closure of the infrastructure lending business of the Co-operative bank particularly affected many UK onshore wind projects. This is turn has meant that renewables developers are less able to borrow against their assets and instead are facing pressure to sell assets quickly in order fund new projects. This can prove especially problematic if there are any obstacles such as grid delays. We believe flexible, well-funded and efficient buyers like Resonance are of strategic importance to the UK renewables industry.
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five:am Acquired by PZ Cussons Company: five: am Web: www.fiveam.com.au Address: 25 Lakewood Blvd, Carrum Downs VIC 3201 Tel: + 613 9770 8650
In August, organic yoghurt company five:am was sold to leading consumer goods company PZ Cussons. We took a closer look at this exciting deal.
Surfer and long time yogi David Prior was inspired to create a product that allowed him to have a clear ecological conscience during one of his early morning moments of clarity. Thus was born five:am – a range of organic yoghurts and granolas. David established the company in 2010 and today five:am has become one of the major food industry success stories of the past decade. David’s vision was to take ‘organic’ from niche health foods into the mainstream, making it more affordable and accessible to everyday Australians. After tipping-in his life savings plus a large bank loan, David got started. “It’s just as much about what’s not in our food as what’s in it – there are no hormones, antibiotics, herbicides or pesticides used in our yoghurts. Better yet, five:am allows indulgence without regret as part of a healthy, active lifestyle,” David explained. five:am’s range of products are designed to empower and inspire people to take on their day. Their mantra is pretty simple and takes only two steps: wake up, be amazing. It’s all about embracing the here and now to become the best you can be, as soon as you wake up. “When you wake at 5am, you get a unique view of the world - a sense of clarity rarely seen throughout the day”, says David. “Whether it’s an early cycle, surf, yoga session or meditation, early morning is the perfect time to let go of yesterday, forget tomorrow and just be here. A time where you can really focus on what’s happening right now”. Sustainability and the environment is ingrained into the DNA of five:am. The milk used in five:am’s yoghurt range is sourced from the Organic Dairy Farmers of Australia, a cooperative of family-run farms dedicated to upholding the highest standards of sustainable and organic farming. Not surprisingly, for one of these families, the Wallaces, the daily routine starts around 5am also, as they prepare to milk the 160 Friesian cows that roam freely around the farm, helping themselves to minerals found at the ‘breakfast bar’ on the sprawling property. This self-serve philosophy is one of the key differences between milk (and ultimately yoghurt) provided from organic farms. When it comes to the health and wellbeing of cows and organic milk more generally, Wendy Wallace says “Cows know what they need. They’ll go and select herbs and minerals that have the nutrients they need” Wendy continues, “for us, organic farming is about remembering how our grandfather’s generation farmed... It’s about getting back to nature, understanding how it works and how to work for it. “The milk our cows produce each day has the same cream component as conventional milk…Yoghurt lovers will notice the difference in the richness and freshness straight away”. Not far from the farms, five:am HQ is based in south-east Melbourne. The five:am team has continually refined its manufacturing techniques to create the best-tasting yoghurt around. And that’s just what it offers – all organic, no additives and always delicious. In August 2014, David sold his business and five:am became part of leading consumer goods company PZ Cussons, joining its family of high-quality food and nutrition brands and creating the platform for five:am’s entry into new and bigger markets both here and offshore. Just as five:am’s growth potential is exciting, it remains as committed as ever to supporting local organisations and suppliers which have helped drive the success of the business so far. And, with an ongoing focus on industry-leading innovation and high-quality products - backed by the reach and scale of PZ Cussons - Australians can expect the five:am brand to go from strength to strength.
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bathstore mbo Company: bathstore Web: www.bathstore.com Address: Second Floor, Meridien House, 69-71 Clarendon Road, Watford, Hertfordshire WD17 1DS
In June, specialist bathroom retailer bathstore was sold by a UK-based private equity house as part of a management buyout. We take a look at the finer points of this major deal. bathstore, which was originally started in the early 1990s by Patrick Riley and Nico de Beer, is the UK’s leading specialist bathroom retailer. The company was formed with the idea of bringing quality, design led bathrooms – formerly a niche area – into a wider retail arena, with an ethos of focusing on the home owner, rather than on the trade buyer. The company published one catalogue that contained all its products for the complete bathroom, with real retail prices. The company prides itself on the quality of its products, working with some of the top European designers to create its bathrooms, and many of its ranges are exclusive to bathstore. The company then works directly with global manufacturers in order to make them affordable. One of the company’s selling points is its innovative “Service by Design”, which helps its customers to transform their initial ideas into their ideal bathroom. The free service can be accessed either instore or by using bathstore’s online design planner. In 2003, bathstore was acquired by Wolseley Plc, the global building materials company. The business became established as the UK’s clear number 1 speciality bathroom retailer through a period of rapid expansion and brand development under the leadership of executive chairman Nick Nearchou. By the end of 2007, the company had more than 170 showrooms throughout the UK. In May 2012, bathstore was acquired by Endless LLP from Wolseley Plc as a non-core asset acquisition for £15m cash. Endless LLP is an independent UK based private equity house, specialising in the provision of financial investment and hands-on operational expertise to businesses facing challenges or finding themselves in special situations. With a flexible approach to funding and market leading speed of investment, the firm has invested in excess of £240m in over 35 acquisitions since its establishment in 2005. Since the acquisition in 2012, bathstore’s business has grown its sales by 30%, and boosted EBITDA by £5m. In June 2014, bathstore was sold as part of a management buyout led by Chief Executive Gary Favell and backed by Warren Stephens, a private equity and banking tycoon from Arkansas. Speaking about the buyout in June, during which Endless was advised by Rothschild and Walker Morris, James Woolley, Portfolio Director at Endless, said: “bathstore is undoubtedly the UK’s leading expert bathroom retailer. Over the last two years we have supported the management team in delivering their vision of providing its customers with a full service solution, offering lower price point entry, price transparency, and enhancing its product range. The excellent exit we have achieved is down to the hard work and dedication of the management team at bathstore and we wish them every success in the future.” “Endless’ support has been invaluable in helping us deliver the improvement in business performance,” said bathstore chief executive, Gary Favell, the former chief executive of furniture retailer MFI. “With their support we have reestablished bathstore as the market leading brand in the sector. With our new partner we will continue bathstore’s growth into the future.” Major transactions can often be fraught with challenges, with people issues, integration – including organisational, employment and communication issues – financial due diligence and the challenge of getting sound strategic advice during the screening process among the common problems encountered during mergers and acquisitions. However, the bathstore buyout was a smooth process which was free of any pitfalls, says Claire Bayliss, Chief Marketing Officer. She attributes this to the hard work of the company’s management team. “We were focused on the end game,” she says. The deal was fairly routine, Bayliss continues, with the transaction being turned around in a matter of weeks. “We turned the business around in a short space of time,” she says, adding that this is testament to the strength of the management team. It is clear that bathstore is a people-oriented business, and the MBO was so successful and problem-free because of the innate understanding between the parties involved, says Bayliss. “There’s a chemistry between the partnerships involved. We have a great relationship with the team at Endless, and the same is true of our new investors”, she says. “Our vision and objectives are really clear”. Looking toward the future, Bayliss says the deal will see bathstore continue to do what it does best: delivering high quality products at affordable prices, with a strong focus on customer service. “It’s all about continuation,” she says. “The deal will help us execute our strategy for growth.”
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NCS Software Ltd Acquires Chameleon Technology Pty Ltd July saw New Zealand-based NCS Software Ltd acquire Australian software firm Chameleon Technology Pty Ltd. Colin Lillywhite, Chief Executive Officer, NCS Chameleon Ltd, told us more about this major deal. NCS Chameleon Ltd is a mid-sized, privately owned New Zealand software business focused on the development of its MAGIQ Performance, Corporate Performance Management and MAGIQ Enterprise, Business Management software suites.
Company: NCS Chameleon Ltd Name: Colin Lillywhite Email: colin.lillywhite@ncschameleon.co.nz Web: www.ncschameleon.co.nz Phone: +64 6 835 9380
The business has a long and successful 30-year history within its chosen markets, which include the Local Government, Healthcare, Aged Care, Not-for-profit, Utilities, Education, Central Government, Professional Services and Corporate sectors. The MAGIQ software suites are used by more than 320 clients throughout Australia, New Zealand, the South Pacific, the UK and the US. The business differentiates itself from its competitors, says Colin Lillywhite, CEO, NCS Chameleon Ltd, by delivering software that is specifically designed to be easy to use and deploy. “For smaller organisations with limited access to resources and capability, the MAGIQ Software Suites provide a less complex and more affordable alternative, while still meeting all of the required product functionality.” The software is completely web based, providing organisations with the opportunity to take full advantage today, of the latest cloud delivery and mobility technologies. The business has 80 staff in offices in Melbourne, Napier, Auckland and Christchurch and all development of the MAGIQ Performance and Enterprise Suites is completed locally in Australia and New Zealand. NCS Chameleon Ltd was formed in July, when NCS Software Ltd acquired Chameleon Technology Pty Ltd, a company which provides software application development and services to the budget/management reporting market in Australia and New Zealand. “NCS Software initially established a business relationship with Chameleon Technology in 2010 acting as a distributor of the Chameleon software into the New Zealand local government marketplace,” Lillywhite says. “Through this relationship, NCS Software became aware there was an opportunity to acquire the business in late 2013, with a formal offer made in March 2014.” The deal took 12 months from initial offer through to completion and PKF acted as advisors. The overall deal size remains private. Lillywhite says the acquisition of Chameleon Technology was a significant opportunity for NCS Software, as it provided several major strategic value propositions, in particular acquisition of the software assets, providing detailed budgeting and reporting solutions to public entities; significant strategic client base; and repositioning of the New Zealand-based NCS Software business and provision of a significant presence in the strategically important Australian market. “It was identified that the acquisition would allow the business to create a more significant and viable business partner for its customers and allow the business to compete more vigorously within its chosen markets to achieve the growth ambitions,” he says. In terms of functional capability, Chameleon Technology had a mature and strongly positioned Corporate Performance Management software suite providing excellent functionality around budgeting, reporting, financial and strategic planning and business analytics, says Lillywhite. “The product suite is extremely complementary with the MAGIQ Enterprise business management application and esssentially delivered the strategic Corporate Performance Management tool that the MAGIQ Enterprise Suite was lacking,” he says. NCS had a rich, extremely stable and growing customer base of more than 200 clients, predominantly in Australia and New Zealand and was undertaking entrance into the US and the UK marketplaces and achieving early success. And, Lillywhite says, the Chameleon customer base is very similar in terms of industry sector focus and size of business to the NCS Software client base. He says that, prior to the acquisition, a number of synergies had been identified in terms of the service and support of the combined client base.
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Several opportunities to strategically leverage the Chameleon business to greater advantage were identified, says Lillywhite: there was a very strong opportunity to strategically leverage the Chameleon brand and market position in order to assist entry and market expansion of the MAGIQ Enterprise Suite within the Australian local government marketplace; the Chameleon brand and the business is very well positioned and well known in the Australian marketplace, where the business needed to position to grow the customer base, revenue, and to also de-risk the business across a greater market spread; the Chameleon suite is a narrower slice of product functionality that is able to be sold across multiple market sectors and across multiple business systems, creating a significant business revenue and growth opportunity; and the Chameleon business had a significant team of services and support and sales staff in the Australian market, providing access to considerable additional skill and knowledge and scale and capability within the primary markets. And in terms of risk reduction, the acquisition delivers a significant opportunity to substantially de-risk both businesses and provide a more significant, viable long-term business partner for customers, Lillywhite says. “The geographical spread of customers across the merged business is much greater; the industry sectors are also greater and more diverse achieving reduced risk through diversity. More clients and more market segments reduces the reliance on any specific market.”
The acquisition fits with the over-arching strategic goals of the NCS Software business, says Lillywhite: to achieve growth through expansion into the Australian marketplace. “The vision was that there was limited competition in the local government sector, particularly for smaller and medium sized Councils with limited viable options, thereby creating an opportunity for a new vendor to enter the marketplace. “While early success had been achieved in the Australian local government marketplace with the MAGIQ Enterprise Suite, achieving this goal through organic growth would not allow the business to achieve its growth ambitions in the desired timeframes.” As we move into 2015 and beyond, the deal sets the combined business up for significant growth and increased penetration into the Australian market, Lillywhite says. “All parties are continuing to work together for the development of the combined business,” he says.
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Cap Energy PLC Acquisition of Djiffere Licence Lina Haidar is Chief Executive of Cap Energy Plc. She speaks to AI Global about the company and its recent expansion into Senegal.
Cap Energy is an independent upstream oil and gas company focused on the exploration, production, and development of conventional oil and gas assets in sub-Saharan Africa.
Company: Cap Energy Plc. Name: Lina Haidar Email: info@capenergyplc.com Web: www.capenergy.co.uk Address: 2nd Floor, 20 Berkeley Square, London, W1J 6EQ Phone: +44 (0) 207 491 9196
The Company aims to build a world-class portfolio of oil and gas assets by targeting known, under-explored, hydrocarbon basins in sub-Saharan Africa. This will be achieved by engaging in local partnerships and joint-venture agreements with Cap’s strong network in the African exploration and production sector. The Directors have a combined total of more than 90 years of experience in Africa and have an excellent track record of managing successful E&P and related businesses in the region. The Company prizes its networks and relationships in Africa, which have been built over a number of decades and through an array of commercial and institutional projects. Cap Energy has strong capability and resources based on its competent and dedicated Board of Directors, its strong alliances in Africa, and a profound operational knowledge of the African oil and gas industry. Lina is a Nigerian citizen with an extensive portfolio of business interests and experience in West Africa. Lina founded OEP Nigeria Ltd, a company which is now a leading provider of turn key office, residential accommodation and housing development solutions in Nigeria. Clients include the Nigerian government, blue chip companies in the oil and gas, and construction and communications sectors. She is also sole Director of Global Energy Trade and is the Chairman of HARU Energy Nigeria Ltd. Lina has an MBA from the University of Monaco. Lina tells us more about the firm and what differentiates it from the competition. “Our team has extensive knowledge of working in Africa with over 60 years’ track record in the region. Our technical team have an extensive understanding of the regional geology having exclusively worked in Africa for 40 years. We have a strong foothold in the region and an in-depth understanding of doing business there.” Senegal has been held up as one of Africa’s model democracies. It has an established multi-party system and a tradition of civilian rule. Although poverty is widespread and unemployment is high, the country has one of the region’s more stable economies. Lina continues to describe the current business environment in the region. “Senegal has the best formula for doing business in Africa today,” she says. “It has been ranked as one of the most stable countries in Africa by the World Bank. It has set a goal to becoming amongst the top ten countries in Africa for doing business in 2015 and it also has a favourable fiscal regime.” Recently, Cap Energy participated in a transaction involving its partner companies, Trace Atlantic oil and Petrosen. The trio acquired an indirect interest in the oil and gas exploration licence on the Block Djiffere, Offshore Senegal. “We all worked together in closing the deal, which took about three months to complete,” says Lina as she embellishes on the deal itself. “Our aim was to be one of the first entrants into the area whilst being able to negotiate a low entry cost. We are hoping that it will open up a new frontier for exploration in the region.” The magnitude of such a transaction presented challenges for Cap Energy. “We were one of the first entrants into Senegal, and had acquired the asset prior to any discovery being made in the region,” says Lina. “It was a challenging move as there was a lot of external scepticism over a greenfield asset in a region without any proven resources – especially with the market gloom over exploration these past few years. “The deal itself was a relatively straightforward process due to the enthusiasm and professionalism of all parties involved, those being Trace, Petrosen, and Cap. We developed good relations with one another and worked hard towards achieving our common objective.” The deal complements Cap Energy’s existing presence in the region and is well in-line with the firm’s strategy to expand in underexplored, underdeveloped regions.
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STRABAG Real Estate Acquisition of the Astoria Office-Commercial Project in Warsaw in October 2014 In October, STRABAG Real Estate GmbH, which ranks among the leading project development companies in Germany and Europe, announced the launch of its ASTORIA office and retail project in the centre of Warsaw. We caught up with Thomas Hohwieler, Managing Director of STRABAG Real Estate GmbH, to find out more about the deal. Company: STRABAG Real Estate GmbH Name: Thomas Hohwieler Email: real-estate@strabag.com Web: www.strabag-real-estate.com Address: Siegburger Str. 229c, 50679 Cologne, Germany Phone: +49 221 824 2000
STRABAG Real Estate GmbH (SRE) ranks among the leading project development companies in Germany and Europe. In addition to its headquarters in Cologne, the company is represented with locations in the main German business centres, in Austria and Sweden, as well as being increasingly active in Central and Eastern Europe. The firm offers fully comprehensive services – from initiation, project planning and realization, right through to leasing and sale. The company’s wide-ranging portfolio includes the development and realization of office, business and retail real estate projects, also covering residential, hotels and special-type properties. SRE is part of STRABAG SE, a European-based technology group for construction services as well as a leader in innovation and financial strength – and as such it has a strong financial basis. “This means, in comparison to other project development companies, we can act quicker and more freely when it comes to taking opportunities for purchasing and developing properties,” says Thomas Hohwieler, Managing Director, STRABAG Real Estate. In October, STRABAG Real Estate announced the launch of its ASTORIA office and retail project in Warsaw. The building will offer 28,000 sqm at ul. Przeskok in the centre of the Polish capital. “ASTORIA is being erected right in the centre of the Polish capital, directly between the Old Town and the city’s business district,” says Hohwieler. “The building stands out being surrounded by administrative, cultural and perfect infrastructure for our tenants in terms of accessibility, catering and shopping possibilities. The completion of the €75m project is planned for the first half of 2016. Besides STRABAG Real Estate, which developed the project, and STRABAG Sp. z o. o., which is the general contractor, most of the consulting companies were of STRABAG group as well. You could say that ASTORIA is almost to 100 % a STRABAG project. The only big exception is the architecture, it comes from Epstein architect’s office.” The ASTORIA Project is another step in STRABAG Real Estate’s strategy of extending its international presence, says Hohwieler. “We hope it will become as successful as many of our other projects, including award winning real estate developments such as Dancing Towers or Milaneo.” The deal’s decisive advantage for STRABAG Real Estate is the already existing presence of the STRABAG SE Group in a number of countries, including Poland, meaning that the entire infrastructure required for the development and execution of a project is already in place, says Hohwieler. “Thanks to this, we could take the chance and extend our international presence with the developing of ASTORIA. Starting with this project, we plan to extend our project development activities in Poland in the future.” STRABAG Real Estate closed the ASTORIA deal mainly with STRABAG Group internal resources, being strongly supported by its colleagues in the legal, tax and treasury departments and their partners. “From the very beginning we implemented that the closing process had to follow the principles of STRABAG Group corporate rules, policies and procedures,” Hohwieler says. Every deal has its own challenges and characteristics. And in the ASTORIA deal, says Hohwieler, following the company’s corporate procedures made overcoming those challenges a whole lot easier. “During the whole time we communicated in an open, transparent and serious way with our negotiating party. Overall this made the deal feel more like an agreement between partners than a ‘hard deal’.” The current business climate in Poland was conducive to a problem-free deal, Hohwieler says. “Due to the low level of interest rates, banks are more willing to give out credits at the moment. Of course this is not true for every country in Europe, but it is for Poland, which we believe to be one of the strongest markets in Eastern Europe. These facts also helped in the closing of the deal, of course.” The deal sees STRABAG Real Estate bring its 50 years of expertise in project development gained in the German market to Poland. “But we are also able to implement our successful strategy of interdisciplinary cooperation with our construction colleagues in the local market,” Hohwieler says. “In addition, STRABAG Real Estate established
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a representative office in Warsaw. With it, we plan to expand our project development business in Poland and generate new projects in the future.” Key to success in any project development deal is location, Hohwieler says. “Furthermore, a spectacular architecture also helps. Nevertheless we also always try to aim for a good cost-benefit ratio for the tenants in our project. For example, at ASTORIA we use a concrete core tempering (CCT) system to control room temperature and further reduce the operating costs compared to ‘traditional’ real properties. All of the above aspects are also important factors for investors buying the project and thus ensure an overall successful project. Not only for us as the developer, but also for the investor on a long-term perspective.” While STRABAG Real Estate always has an eye on the future, for the time being it is focused on finishing the ASTORIA project and making it a success, Hohwieler says. “As it is our first project in Poland, the market will judge us by it. Nevertheless we are of course also looking for other opportunities for new project developments – including own developments as well as joint ventures. For the future, we think that Poland may become one of STRABAG Real Estate’s key markets.”
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The Changing Face of Wyless Gilli Coston, Chief Strategy Officer at Wyless Group, the leading M2M managed services provider, tells us about the firm’s recent acquisition of Dutch firm ASPIDER M2M.
In April this year we announced the acquisition of 100% of Netherlands-based ASPIDER M2M. Headquartered in the Netherlands, ASPIDER M2M is active across the rest of the Benelux region, has established offices in Germany and is increasingly expanding its presence in DACH. We see this acquisition bringing Wyless a number of very positive attributes. It strengthens the company’s position in mainland Europe, it provides core network expertise into Wyless and brings a team of great people into the Wyless business. Company: Wyless Group Name: Gilli Coston Web: www.wyless.com Address: 60 Island Street Lawrence, MA 01840, USA Phone: +1 617 949 8900
Though the geographical complementarity is evident, what is perhaps not quite so obvious at first glance is the additional capabilities that ASPIDER M2M brings to the Wyless Group. Specifically this relates to core network elements: ASPIDER M2M runs its own Cisco and Oracle based core network of GGSNs, HLRs and Intelligent Network, allowing it to act as an MVNE for IOT. This core network capability has implications for how the group might support large multi-nationals. For some customers, operator independence is important, particularly the larger Enterprises and Utilities. Wyless will complement its portfolio with an operator independent solution that ASPIDER M2M has already deployed to customers like Philips and Stedin. It is also noticeable that the Wyless approach of providing end-to-end managed services, including the likes of multi-operator support and device lifecycle management will dovetail nicely with ASPIDER M2M’s approach of providing Core network based IOT Solutions. The final benefit for Wyless of the ASPIDER M2M acquisition is that it brings some excellent people into the business, significantly increasing the human capital at the company’s disposal. Michael Zwijnenberg, VP ASPIDERM2M said, “I believe strongly in the emerging Internet of Things market. There will be a premium for the company being the 1st to claim leadership in this market and I want to be a part of that company. ASPIDER has a focus on offering core-network based solutions in the areas of operator independence, security and outsourced billing via its prepaid IN. Wyless has lately been focussed on building more complete and complex end-to-end managed services around IOT deployments. Product wise this is a perfect fit and together I believe that we can win the market with our think Global act Local approach.” As part of the acquisition, Jan Willem van Doorn, Chairman of ASPIDER Holding, who negotiated the deal with Wyless Group Founder and Chairman Christopher Lowery, joined the Wyless Board of Directors. This announcement comes on the heels of the October 2013 acquisition of Brazil’s TM Data, run by Sergio Souza, which provides the Latin American element. Sergio Souza, CEO of Wyless TM Data said “Wyless technology and experience along with TM Data’s market penetration in Latin America creates a solid and dynamic partner to quickly develop M2M or IoT projects during conception, roll out and operation phases. The market for connected devices in Brasil and our surrounding countries is set to explode and we are gearing up to address it with scale and vision, and build value for our customers looking to expand here.” These acquisitions provide the platform for Wyless to experience explosive growth in Europe and Latin America and continued out-performing the market growth in North America.
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Nexstim IPO As one of Finland’s many innovative technology companies, Nexstim is focusing on improving rehabilitation for stroke patients through the use of non-invasive brain stimulation.
Formed in 2000, Nexstim is a medical technology company developing technology using transcranial magnetic stimulation (TMS).This is a non-invasive method used to stimulate small regions of the brain. “Primarily, Nexstim is aiming to improve rehabilitation for stroke patients,” said Janne Huhtala- CEO at Nexstim. “Nexstim has pioneered its technology in brain diagnostics with the Navigated Brain Stimulation (NBS) system as the first and only FDA-cleared and CE-marked navigated TMS device for pre-surgical mapping of the motor and speech cortices.” Company: Nexstim plc Email: info@nexstim.com Web: www.nexstim.com Address: Elimäenkatu 9 B FI-00510 Helsinki, Finland Phone: +358 9 2727 1710 Fax: +358 9 2727 1717
Based on the same technology platform, the company has developed a device for stroke therapy called Navigated Brain Therapy (NBT®). In H1 2014, Nexstim initiated a two-year pivotal Phase III study at 12 sites in the US aiming to demonstrate the effectiveness of NBT® and gain FDA clearance for commercialisation in post-acute stroke therapy in the US. Nexstim is situated in an environment of continued expansion. Not only is the Finnish State very helpful towards developing Finnish companies, Scandinavia is also renowned for its high quality heathcare and scientific research. “Finland is host to some remarkable technology companies and we are proud to be a part of that,” said Huhtala. “The Government is very supportive of small companies developing medical technologies. Within the Nordic regions we have some of the strongest specialist healthcare, life sciences and technology investors and with our IPO we saw that this is also true for public companies.” In November 2014, Nexstim listed its shares on Nasdaq First North Finland and Nasdaq First North Sweden. In total, 2,408,339 shares were subscribed and paid for in accordance with the offer terms for the final offer price of EUR 6.35 per share. Nexstim raised approximately 15.3 million euros before costs associated with the Offering and the total number of issued shares in the Company will increase to 7,130,758. The announcement made Nexstim the 40th company to be admitted to trading on First North Nordic markets (Stockholm, Helsinki, Copenhagen and Iceland) in 2014. This is the first time a company is dual-listed simultaneously on two Nasdaq marketplaces. Nexstim’s shareholders and board of directors believed that it was an appropriate time to broaden the shareholder base and to apply for the listing of the Company’s Shares on First North Finland and First North Sweden. The aim of the Offering was to support the growth and operational strategy of the Company. The FN Listing of the Shares will increase the public profile of the Company and its business, and provide Nexstim with improved access to capital markets and a diversified base of new Nordic and international shareholders. The Company believes that these factors will further enhance its position in the Finnish and Swedish markets, and internationally, and provide the appropriate platform for its future development and access to capital for its NBT® System’s commercialisation phase if the FDA clearance for marketing the device for stroke therapy is obtained. Involved in the deal were Pareto Securities AB- who acted as Lead Financial Advisor and Joint Arranger and UB Securities Ltd – who acted as Financial Co-Advisor and Joint Arranger. The Company’s Certified Adviser under the First North rules is UB Capital Ltd. Krogerus Attorneys Ltd and Advokatfirman Vinge KB acted as legal advisors to the Company in the Offering. Consilium Strategic Communications Ltd advise on financial public and investor relations and communications. Speaking about the conditions, “The market conditions during the float were challenging however Nexstim made a clear and compelling investment case which helped it successfully raise 15.3 million euros.” The IPO enables Nexstim to: • • • •
Finance the Phase III, two year, multi-centre trial for the use of the Company’s NBT® System in stroke therapy; currently being conducted at 12 prominent rehabilitation sites in the US; Pursue regulatory clearances, including but not limited to FDA De Novo 510(k) clearance for marketing the NBT® System for stroke therapy; Execute pre-commercial activities of the NBT® System for post-acute stroke therapy and business development of the NBS System for diagnostics; Explore other potential application areas for example pain and tinnitus; and
Without raising the capital Nexstim wouldn’t have been able to fund the Company’s next development stage through to the end of the Phase III multi-centre trial and FDA clearance for marketing the NBT® System for stroke therapy, which is expected to take place in the end of 2016. Achievable, yet significant, milestones towards producing practicechanging technology that can be understood and realised by investors.
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How Good Partnerships Promote Success We at Symphony Communication Services are honored to receive Acquisition International’s Deal of the Year award for our fundraising work with 14 of the world’s most prominent banks in a deal that was announced in October 2014.
Some may wonder why Symphony, a Silicon Valley-based, technology startup, was backed by several well-known Wall Street institutions. While at first glance this may seem like an unusual alliance, there are actually many synergies at play. Overall, finding the right partners has always been ingrained in the DNA of Symphony, from our beginnings as Perzo to our recent announcement of the acquisition of technology assets from Markit.
Company: Symphony Communication Services Name: David Gurle Web: www.symphony.com
When I founded Perzo in 2012, the predecessor to Symphony, I did so with the goal to change the way business is done by making communication between all people simpler, yet richer. In a recent blog post, I discussed Digital Communications Fatigue, or DCF, as the frustration felt by our inability to be fulfilled by the numerous, existing communication channels that complicate the communication processes in our lives. When the Perzo platform launched in November 2013, we had taken the first step toward my vision of bringing together the fragmented messaging marketplace by creating one communication hub that is available to everyone. Working with the financial services industry, where information is currency, became the next obvious step. We knew that their needs and desire for a more performant communication platform would validate and refine our vision in helping us to become the global communication platform for high-value content. As we were engaged in product discussions with our potential customers, it became obvious that their desire to have a solution to their communications needs would be best architected if they would also become investors in Symphony. This investment construct gave us a unique edge over other solution providers. The investment by these financial institutions has provided the infusion of capital and beta testers needed to grow and expand our platform into a global communication and collaboration solution for all business and professionals. As a result, we were able to make our first acquisition – in December 2014, we acquired technology assets from Markit’s Collaboration Services. This acquisition made perfect sense. Symphony and Markit share a similar philosophy in regards to an open approach to communication, particularly as it pertains to the financial industry. By incorporating this technology into our secure messaging platform, we have created a secure and managed directory of verified contacts across the industry. This will bring immediate efficiencies and value to our existing customers. Identifying and creating partnerships that are complementary to our goals has been a crucial aspect of our growth and success thus far. Looking to the future, we see many opportunities to create new partnerships that will move us even closer toward our goal of simpler, richer and more human communication for all – to the financial services industry and beyond.
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Web: www.oandoplc.com
Oando Plc Acquires Assets from ConocoPhillips In July 2014, Oando, one of Africa’s largest integrated energy solutions providers, acquired ConocoPhillips’ Nigerian oil and gas business for $1.5bn. We took a closer look at this landmark deal. Currently, many in Western markets are wary of what exposure to emerging markets could mean for their margins – meaning local players are able to reclaim a share of the domestic market. One such firm is Nigeria’s Oando – already among Africa’s leading energy providers, and enjoying a newfound status as one of the region’s premier oil and gas producers. Made up of six entities, Oando has listings on the Nigerian, Johannesburg, and Toronto stock exchanges, and has headed operations in exploration and production, energy services, gas and power and downstream activities, and has made a number of pioneering breaking advances in the Nigerian energy sector. But now, the company is setting its sights even higher, starting with its recent US$1.5bn acquisition of ConocoPhillips’ hydrocarbons assets. The landmark acquisition has transformed Oando into Nigeria’s leading indigenous exploration and production company, with a total hydrocarbon production of approximately 53,000 boe/d (barrels of oil equivalents), 2P reserves of 230.64 MMboe (millions of barrels of oil equivalents) and 2C resources of 547 MMboe. Furthermore, the transaction is immediately cash generative, with expected annual revenues of over US$600m and 50% earnings before interest, taxes, with depreciation and amortisation margin to boot. The deal has increased Oando’s capacity eight-fold: pre-acquisition, the company had a production rate of approximately 5,000 bpd. The agreement has rapidly consolidated its stature as a leading name in the West African oil and gas business. Although the country’s overall production rate is far short of what it once was (due mainly to theft and sabotage) the company expects the production rate to climb by another 600,000 bpd over the next five years, on top of two million barrels produced daily already. With an ambition to produce 100,000 bpd before 2019, Oando’s position in the African energy market seems set only to become stronger. The ConocoPhillips deal illustrates just how far the Nigerian oil and gas sector has come in terms of growth and development, and the increasing measures taken by home-grown companies to put their stamp on the domestic market. “We believe in the significant potential that the Nigerian oil and gas industry holds and are privileged to play a pivotal role in its consolidation, growth and development,” says Wale Tinubu, Group Chief Executive of Oando. “We will continue to seek strategic opportunities that provide a platform for enhanced growth and value creation for our stakeholders.” After selling its Algerian oil business last year for US$1.75bn, ConocoPhillips, which is America’s third-largest integrated energy company, has again opted to reduce its emerging market operations and hone in on home-grown shale riches, principally in North Dakota and Texas. The development has, however, given local players a greater say in the domestic energy market, not least in the case of Oando, which has recently emerged as a key constituent of the region’s ever-evolving hydrocarbons sector and an attractive investment partner. Originally signing on to a sales and purchase agreement (SPA) with ConocoPhillips in December of 2012, the transaction was concluded in July 2014. “This transaction represents a transformational leap forward for our company and is in keeping with our overall strategy to grow our portfolio of Nigerian-based assets, by focusing on those opportunities that deliver high quality growth in reserves and production,” said Upstream Head, Pade Durotoye, CEO, Oando Energy Resources, shortly after the deal was closed. “Our management team is familiar with these assets and possess the managerial experience and technical expertise necessary to unlock their value for our shareholders.” The net cash consideration for the transaction was approximately US$1.5bn, after customary and working capital adjustments, plus a deferred consideration of US$33m. A deposit of US$550m was paid to ConocoPhillips to underpin the closing commitment from the date of signing the sale and purchase agreement in December 2012, to closing in July 2014.
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The financial structure of the acquisition was funded with a 50/50 debt/ equity mix, made up of proceeds from a US$450m senior secured facility, US$350m for a corporate loan facility, US$100m from a subordinated loan facility, US$50m from a private placement offering of Oando shares, and balance proceeds from a US$1.2bn shareholder loan facility agreement with Oando PLC – converted to equity.
Oando’s key financial partners included BNP Paribas, Standard Chartered Bank, Standard Bank, African Export-Import Bank, FBN Capital and FCMB Capital. Oando believes the deal represents an opportunity for the company to expand upon its presence in the global energy market, and create value for its shareholders. For example, the total reserves and resources tied to the transaction amount to probable reserves of 211.6 MMboe, best estimate contingent resources of 509.1 MMboe and unrisked best prospective resources of 669.7 MM- boe, represent a sizeable increase on reserves prior to the acquisition. The deal will also see the company acquire a 20% working interest in Nigerian Agip Oil Company’s (NAOC) operations, who currently oversees forty discovered oil and gas fields, 24 of which are well into the production phase. The joint venture, comprising Nigerian National Petroleum Corporation, Eni, and now Oando via OER, also boasts an impressive portfolio of 40 identified prospects and leads, 12 production stations, three gas processing plants, and close to 1500km of pipelines. Prior to the transaction, Nigeria’s production stemming from its ConocoPhillip onshore assets averaged at 36,494 boe/d through 2013, and in the first half of 2014 came to 39,266 boe/d. In addition to the company’s production capacity, OER onshore assets include a further 211.6 MMboe of proved and probable reserves, 217 MMboe of best estimate contingent resources and 333.6 MMboe of unrisked best prospective resources. The company’s offshore assets, meanwhile, are drawn from shares in six fields and eight prospects, which together contain a total of 292.1 MMboe of best estimate contingent resources and 336.1 MMboe of unrisked best prospective resources. However, Oando’s end of 2013 proved plus probable reserves of 230.6 MMboe, best estimate contingent resources of 547.3 MMboe, un- risked best prospective resources of 2,064.6 MMboe and a half year, 2014 production of 44,512 boe/d. With half of the deferred consideration of US$33m due six months after closing the deal and the remainder due by 12 months, OER looks set to increase its cash flow in the immediate term.
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Ericsson Acquires Majority Stake in Apcera We take a closer look at Ericsson’s September 2014 acquisition of a majority stake in Apcera, a US-based enterprise services company.
Name: Derek Collison Web: www.apcera.com
In September 2014, after just three months of discussions, Ericsson took a majority stake in Apcera and invested significantly in Apcera’s growth trajectory. Soon afterwards, Apcera released its policy-driven platform called Continuum, a PaaS++ that deploys, orchestrates and governs a diverse set of workloads – from apps and services to operating systems and Docker containers – on premise and in the cloud. The solution is now in use by Global 2000 companies and telco service providers. Apcera was founded in 2012 by former Google and VMware executive Derek Collison, who designed and architected the industry’s first open platform-as-a-service (PaaS), Cloud Foundry, while at VMware. His goal with Apcera was to create a solution that addresses the limitations of conventional PaaS, integrating policy and security consistently across all IT environments while enabling a faster time to market. As enterprises move to the cloud, and increasingly adopt a hybrid cloud strategy to improve their agility and reduce cost structures, they are faced with numerous deployment and management challenges. Among the problems enterprises encounter in the hybrid cloud include an inability to adequately and consistently apply policy and ensure security across all IT environments, a diversity of management tools purpose-built for a specific cloud provider or hardware/software vendor that are not easily integrated within both public and private clouds, and the lack of visibility into performance of all infrastructure and workloads. Apcera’s Continuum platform can address these pain points by serving as a hybrid cloud operating system, enabling consistent application and enforcement of policy, providing insight into operations and management of access to computing resources both on premise and in public clouds. “The hybrid cloud is hitting an adoption tipping point, with more than 65 percent of enterprises indicating they will commit to hybrid cloud technologies in 2015 alone. Apcera sees a great opportunity in helping these organizations ensure the success of their hybrid cloud deployments,” said Collison, Apcera’s founder and CEO. “The investment furthers Ericsson’s goals to grow its cloud business. And it enables Apcera to support the explosive market demand through faster business scaling of our offering, anticipated growth of our workforce by 300 percent this year, and allowing us to more quickly deliver a hybrid cloud solution based on policy and governance that is required by global enterprise IT organizations and telcos.” Ericsson’s head of cloud strategy, Jason Hoffman, and Collison spearheaded the deal, which included Apcera retaining its name and continuing to operate as a standalone company with Collison at the helm.
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2014 TOP TRANSACTIONS
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