Applied wisdom needed...
Big deal coming on the public markets
Hello Rainmakers,
This is our Friday round up, with links to our two premium stories this week.
On Tuesday Anna Cooper spoke to Andy Moody, Alvarez & Marsal’s first Corporate Finance Managing Director in Birmingham.
He said, the Big Four are turning their backs on the regions. Fighting Talk indeed.
On Thursday, we produced a frantic wrap of the deal activity going on around ‘Mad October’. What’s this doing to prices?
A BIG DEAL COMING ON THE PUBLIC MARKETS
The biggest deal that crossed our collective desks this week was an eagerly anticipated stock market float, a symbol of the animal spirit and ambition of North West businesses embracing new frontiers in a growing sector.
We could be talking about Applied Nutrition, the trouble is, we’ve heard this before.
Loop back ten eventful years and the headlines that greeted the market debuts of boohoo at £560m (peak valuation £4billion in 2020) were that the only way was up.
Boohoo’s share price has tanked over the last five years by more than 85 per cent.
The markets are now openly pricing in a break up of the fast fashion giant that is also fighting fires on all fronts, not least with Sports Direct’s Mike Ashley surpassing the founders as the largest single shareholder.
In a compressed time frame and on a smaller scale, we’ve also seen a collapse in value at Stockport-based ‘circular economy’ retailer musicMagpie, which floated in 2021 at a market cap of £208 million.
This week AO World, led by John Roberts (above), bought the business for £10m, a move that could well turn out to be bargain of the century for the Bolton-based white goods retailer, which has had ups and downs of its own in its own stock market journey.
Both boohoo and Musicmagpie (and THG) will stand as salutary lessons that will be on the minds of the advisory team behind Applied Nutrition. Price too high and the significant market event becomes seen as an exit event for the founders and for investor JD Sports. At stake is longer term credibility of the business as a growth play.
At least the value proposition of Applied Nutrition is rooted on its core product and target market, and not a backroom engine that’s difficult to comprehend.
There’s a sense however that the timetable is being influenced by the current market nervousness over Rachel Reeves intentions in the forthcoming Budget.
We’ve christened this period Mad October; with intense activity, late nights in the office, copious amounts of coffee - and journalists asking annoying questions, the like of which is normally only seen on football’s transfer deadline day.
It’s certainly triggered a scramble to complete deals before anticipated changes to Capital Gains Tax (CGT) or meddling with Business Asset Disposal Relief (BADR).
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Elsewhere, the consolidation in the professional services world claimed another fascinating chess move.
Cooper Parry (CP) added 200 staff to its team after completing on deals to acquire UHY Hacker Young Manchester and Haines Watts Thames Valley/Reading.
The deals see CP increase its team headcount across audit, tax, outsourcing and deals to over 1,400 and takes group turnover to £180m for the current financial year.
The move follows the recent acquisition of London-based Salesforce consultancy, Cloud Orca, and co-founding the global professional services firms’ community, ATLAST.
Ade Cheatham, Cooper Parry CEO, said: “Two landmark deals over the last couple of days confirms our ambition to create the UK’s next gen professional services group. Acquiring UHY Hacker Young Manchester allows us to establish a powerful presence in the Northwest. In the same way, the Thames Valley deal accelerates our growth down the M4 to create the #1 advisory firm in the UK’s ‘Silicon Valley’ and Southwest.”
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The temperature has proven ideal for two durable West Yorkshire specialists to join forces.
Otley-based Penmann Climatic Systems, which has provided cooling technology solutions to the food and drinks industry for 45 years, has turned out to be an attractive proposition for an even longer established firm.
It has been acquired by Elland-based temperature and humidity control expert Newsome - which has been in business since 1973 - in a deal which is anticipated should safeguard Penmann's future for another 50 plus years.
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Clearwater has advised the shareholders of Rutland Partners-backed JSM Group (JSM) on its majority sale to TowerBrook Capital Partners (TowerBrook).
JSM is a market-leading provider of technical infrastructure services to the UK and Ireland’s power and communication markets, with significant future growth opportunities throughout Europe. JSM is recognised for its differentiated knowledge and expertise in its core markets, strong operational capability, and significant commitment to quality customer service as well as health and safety.
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COME AND LERN FROM THE WINNERS
As the corporate finance community anticipates the end of a subdued and uncertain period, the upcoming Rainmakers Forum in Manchester on the 8th of October will explore the challenge of becoming deal-ready for 2025, and the deals frenzy gripping the current market.
Featuring insights and contributions from the winners of the Rainmaker Awards – Nicola Merritt and Catriona Lang (pictured) – the event will look ahead at where the deals are going to come from in the year ahead.
With a more stable policy landscape expected following the general election and some economic headwinds easing, the seminar will concentrate on several key areas:
Current market demand and appetite
Changing culture and practice in the Rainmakers community
Funders’ primary areas of focus
The increasing significance of factors beyond financials, especially ESG and data
Opportunities within the North West market and Rainmakers’ role in driving growth
Event details to come soon. As well as the winning duo, the speaker line-up will also feature Giles Chesher from Squire Patton Boggs and Matt Hodgson from Claritas Tax, with more to be announced.
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RAINMAKERS CONFERENCE IS BACK IN 2025
The art of such deals is just the sort of thing which will pepper our 2025 Rainmakers Conference.
It’s being supported by BGF, Dow Schofield Watts, NorthEdge, Palatine, Shawbrook, Squire Patton Boggs, while PHD Industrial Holdings is a breakout room partner.
So save the date for Rainmakers 2025 – Wednesday 26 March, 2025 – and secure your place today at The Point, Emirates Old Trafford, Manchester.
It will bring more opportunities to network, more amazing speakers, more candid debate, more inspiring entrepreneurs, but also a chance to discuss the challenges of value creation.
The first Rainmakers Conference this March sold out, with more than 400 people attending to hear the insights and perspectives from entrepreneurs, investors and advisors, and to network with senior figures from across the corporate finance community.
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