Two scoops this week, plus golf, money and FRP’s Welsh raid
What you've been missing on our premium Rainmakers feed
Hello Rainmakers,
We’re steadying ourselves for the summer slowdown. But, this week has seen another uptick in subscribers.
Welcome to those of you who signed up on the back of either of our two exclusive interviews with big hitters of the calibre of Andy Gregory of BGF and Warren Mead of Sumer.
We’ll share a couple of choice extracts from them both in the round up below.
We’ve also got a few lively takes from around the country from our team of reporters.
This is a reminder that this is a Friday free round up. Please consider supporting this venture with our modest subscription offer to get our longer pieces every Tuesday and Thursday.
NATIONWIDE GETS CLEARANCE FOR VIRGIN DEAL
The proposed deal between Nationwide and Virgin Money has been given the green light from the competition watchdog, the first big deal to go through since the new government was elected.
The approval from the market authorities has paved the way for the £2.9bn deal to be completed in the final quarter of this year.
The Competition and Markets Authority (CMA), which opened an investigation into the deal last month, said in a statement the combination of the two firms was a “relevant merger situation” that would not give rise to a realistic prospect of a substantial lessening of competition.
The deal is expected to result in one of the biggest shake-ups in the UK retail banking market in years and will create the country’s second biggest mortgage lender after Lloyds Banking Group.
The CMA said it had received concerns from individuals who were of the view that Nationwide’s members should have had the opportunity to vote on the acquisition of Virgin Money.
However, the concerns did not fall within the scope of its investigation.
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WHITE KNIGHT FOR GOLF CLUB
For those that way inclined, anyone perusing the TripAdvisor reviews for Newark Golf Club might have assumed the venue was going down the pan - they might've had a case.
A white knight rode to the rescue of the club this week, to ensure it'll continue to host the great and the good of north-east Nottinghamshire. Stellar Asset Management, which owns a number of golf clubs and leisure resorts, has swooped in to buy the venue.
The deal has not only secured the future of the historic golf club and saved jobs, but, unusually, it will also deliver a significant dividend to its 400-plus members.
Earlier this year, the directors of the club, which was founded in 1901, recognised that its funds were not sufficient to undertake the substantial improvements needed to update the 18-hole course and clubhouse, threatening its ability to continue to operate without becoming insolvent.
With the support of the membership, the directors worked with Begbies Traynor to market the club while managing its cash flow and reserves, enabling it to continue to trade during the sale process.
A Stellar deal indeed.
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SHORTS BUYS HEWSON AND HOWSON
South Yorkshire and North Derbyshire-based accountancy and tax specialist, Shorts, has acquired South Yorkshire accountancy firm Hewson & Howson. The deal sees all of the Hewson & Howson employees join the Shorts team.
Formed by Ian Hewson and Andrew Howson in 1995, Hewson & Howson has specialised in providing a partner led service to owner managed businesses. The two founders are both retiring, and say they wanted to transfer their business to an accounting firm with a similar culture and service ethic. They've certainly picked a buyer with pedigree - Shorts has been in business since 1890.
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PARTRIDGE SELLS LEXINGTON TO FRP
One of the new entrants shaking up the M&A market is FRP, the listed professional services group with roots in insolvency and turnaround.
Today, Friday the 19th of July, they inked a deal to buy Lexington Corporate Finance for £3 million, with £2.2 million in cash and FRP shares worth £1.3 million.
Gary Partridge is a well known, well liked corporate financier in the south Wales market, and will join FRP as a partner. The other 14 members of his Lexington team will also join FRP.
He founded Lexington as a UK Mid-Market advisory firm after leading PwC's Corporate Finance team in the West of the UK and also a spell in global acquisitions with BT’s M&A team.
Last financial year Lexington made £600k of EBITDA, on revenues of £2.3 million FRP expects that to tick up next year.
It’s in line with FRP's strategy to buy businesses that give it market share, offer something new and expand its geographical footprint. The acquisition is FRP's tenth since IPO in March 2020.
Geoff Rowley, CEO of FRP Advisory said: "Wales was a target region for FRP and this acquisition further strengthens our National Corporate Finance business. The team will go to market locally as FRP Corporate Finance.”
Gary Partridge, founder of Lexington, said: "We are all immensely proud of what we have achieved as a team at Lexington over the past nine years and being part of FRP will be a launch pad to enable us to offer a broader range of services to our clients.”
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ANDY GREGORY OF BGF ON THE BATTLE FOR HEARTS AND MINDS
Andy Gregory, the chief executive of BGF, spoke to us after an exhilarating awayday with his team.
The former classical musician is as thoughtful as he is ambitious. He’s also very usefully mapped out for our Rainmakers readers just what makes BGF different in a very crowded and ever changing investment landscape.
Unlike a standard private equity fund with investors and limited partnerships to satisfy, BGF is different because of its heritage, originally formed as the Business Growth Fund. It was born out of the financial crisis of 2007 and 2008, as a way of proving that the High Street mainstream lenders could do something positive to support Britain’s growing business.
Its shareholders are NatWest, Barclays, HSBC and Lloyds, with a small holding retained by Standard Chartered.
Part of his challenge, he says, is more subtly influencing the performance of businesses from a minority position.
“We can't just say we're in control. Do this. It needs to be winning hearts and minds, and I think having an influence. So for that reason, and a raft of others, the quality of people we need is really high.”
To read the full piece, click on the button below.
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WARREN MEAD IS ON A MISSION
We caught up with Warren Mead, who is leading the ambitious professional services buy-and-build of Sumer, which most recently bought the Stoke-on-Trent practice DPC, taking their hub count to eleven.
It’s illuminating and gives some insights on what is driving Sumer’s consolidation strategy.
One of Sumer's board directors is Steven Scott a founding partner of Penta Capital LLP who specialise in funding private equity opportunities in the UK mid-market. Penta work alongside Toscafund, a global multi-asset manager, and have been active in platform investments, buyouts and take-private investments, mainly in the UK.
Mead says he has a good relationship with the board, and says they really understand the accounting market. The two main principles that he deals with Jason Harvey and Steven Scott are both Chartered Accountants by background, and Jason Harvey sits on the board of the professional body ICAS in Scotland.
“They get that this is a people business so you have to approach it with that mindset, it's not a widget factory. And I know some of the private equity houses think of it in that way. The Penta guys know that our most prized asset is our people, and it's so important we look after them.”
He describes their track record in the consolidation of the insurance brokerage market and IFAs as “stellar” and says the day to day relationship is like that of a trusted advisor. He says he speaks to Harvey and Scott two or three times a week to ask their view on things.
To read the full piece, click on the button below.
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