Steady deal flow in August
And the prime cuts from our premium product this week
Hello Rainmakers,
Our Friday round up this week shows a steady amount of deal activity into the holiday month of August.
Subscribers to Rainmakers had a real treat on Thursday with Anna Cooper’s story on the court battle between InTouch Games (ITG) and billionaire Teddy Sagi's Skywind brand, which bought it for £54.5 million.
We hope you are enjoying these deep dive investigations into stories that concern the world of mergers and acquisitions. There’s plenty more to come, and we’re always on the lookout for tips about others we should follow up.
Court papers make claims that Israeli billionaire Sagi (above) told Simon Wilson: “You can sell it to other companies for more money and they will take 6 months to do due diligence. I will buy it in 10 days and I won't do any due diligence and I don't want any guarantees or warranties. I don't even want tax warranties" - something Sagi denies.
Subscribe and read the whole thing, it’s a cracker.
Elsewhere, an interesting thought provoking piece from Sam Metcalf pointed out that while the negative effects of Brexit have been legion, overseas M&A activity has stacked up quite well.
RIVER CAPITAL MAKES THREE TIMES RETURN
Liverpool-based fund manager, River Capital, has completed the successful exit of its investment in Carebeans, a pioneering healthcare operations software company, reaping a 3x investment return.
Carebeans, which is based in Daresbury, has been acquired by RLDatix, a specialist in connected healthcare operations software and services.
Carebeans has always sought to use technology to help people live their lives with dignity while helping care givers provide consistently high quality support unencumbered by onerous, often disconnected, systems and processes.
The funding from River allowed Carebeans to accelerate its growth in the social care sectors with the opening of a second office and the recruitment of a specialist skilled team.
It also allowed Carebeans to acquire the trade and assets of software business Standex Systems.
River Capital originally invested in Carebeans in December 2021, with the subsequent exit delivering a 3x multiple on invested capital and an Internal Rate of Return of circa 60%.
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European investor Nimbus has exited two investments in Yorkshire and the North East, and teased news of an imminent deal.
It has exited Paralloy and Hawthorn Timber, which it said provided “a strong justification for the expansion of Nimbus’s investment activities into the UK in 2019 despite post-Brexit concerns about inward UK investment”.
Nimbus launched its UK office in 2019 with the appointment of former Endless partner Chris Clegg as chairman.
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We’ve been tracking Revolution Bars all year, ever since it launched its twin track sales process, and/or a restructuring plan. This morning (9 August) they told the stock market it had got approval by the court, meaning the company can reduce its property costs and extend its lending facilities.
A new slimmed down business consisting of 27 Revolution Bars, 15 Revolución de Cuba Bars, 22 Peach Pubs and one Founders & Co. site will be capable of adding “a significant annualised EBITDA improvement” of c. £3.8 million, the company said in a statement to the stock market this morning.
Following the deal a further 12 bars will close, although a spokesman for the company insisted this is “no more than originally stipulated”.
The alternative was a sale of the AIM-listed business, or a merger with another bar operator.
The popcorn is now out for what outspoken investor Luke Johnson has to say about his plans for the business now that he owns a chunk of it.
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HOUSEBUILDER DEAL COULD LIVE OR DIE IN SHROPSHIRE
Barratt’s £2.5bn deal to acquire Redrow Homes has ignited competition concerns in Shropshire which must be addressed by the housebuilder in order for the deal to proceed.
The shareholders of Leicestershire-based Barratt and North West’s Redrow voted in May to progress the mega-deal, to create a group that turned over £7.5bn last year and will have a land pipeline of over 92,000 plots.
The Competition and Markets Authority (CMA) has said its Phase 1 investigation found local competition concerns around a Barratt development in Whitchurch, Shropshire, which includes nearby towns such as Nantwich, Ellesmere and Market Drayton.
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LANGLEY’s ITALIAN JOB
Langley Holdings, an engineering and industrial manufacturing group, has acquired GKN Hydrogen from the Dowlais Group.
Headquartered in Nottinghamshire, Langley Holdings was founded in 1975 by its current Chairman and CEO, Tony Langley. The Group operates in three main sectors: power solutions, print technologies, and other industries.
It boasts 18 manufacturing facilities across Europe, the UK, and the USA, supported by a global network of over 100 sales and service subsidiaries, with a workforce exceeding 5,000.
GKN Hydrogen, based in Northern Italy, specialises in all-in-one clean hydrogen energy management systems. It previously formed part of GKN Powder Metallurgy, a division of Dowlais Group.
It will become a component of Langley’s Power Solutions division, which includes Bergen Engines in Norway, Italian Marelli Motori, and Germany-based Piller Group, a producer of critical power systems.
In 2024, the division is expected to generate about half of the group’s $1.5 billion revenue.
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RAINMAKERS SEMINAR IN BIRMINGHAM
As the corporate finance community anticipates the end of a subdued and uncertain period, the upcoming Rainmakers Seminar in Birmingham in September will explore the challenge of becoming deal-ready for 2025.
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
Funders’ primary areas of focus
The increasing significance of factors beyond financials, especially ESG and data
Opportunities within the Midlands market and Rainmakers’ role in driving growth
Hear from Katie Trout, director of policy & partnerships at the West Midlands Growth Company on what opportunities are available for the corporate finance community to engage with across the region.
A keynote speech from a leading West Midlands business figure will follow, offering their insights into working with Rainmakers on M&A proposals and securing investment.
An expert panel consisting of Tom Hustler, senior investment director at Palatine, Nick Gillott, corporate finance partner at Grant Thornton, Deepak Parekh, senior director at Shawbrook Bank, with more speakers to be announced.
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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