Corporate Review. Delivering an excellent service

Transcription

1 2012 Corporate Review Delivering an excellent service

2 Welcome to our Corporate 2012 Review 2 Corporate 2012 Review

3 A busy year in a tough corporate market 2012 has been a busy, but tough year. Our focus has been to work hard to continually deliver an excellent and relevant service to our clients whilst building strong working relationships and enjoying the time we spend with them. Our approach contributed to 2012 being a busier year for our team than 2011, completing 113 deals with a total value of nearly 558,500,000. The number of deals during 2012 increased only slightly on 2011 but the overall deals value was up 33%. This jump in value largely resulted from two significant transactions that we completed outside the region. The range of transactions that we have seen taking place remains broad, added to which, the North East had its first AIM flotation for more than five years when we listed Utilitywise plc in June. Our objective has been to remain flexible and to be able to deliver the transactions that the corporate finance market presents. Our review demonstrates that we have continued to deliver on that objective with a mix of work from large overseas corporates, national corporates, our core market of local owner managed businesses and the growing group of start up businesses and local funds supporting them. The number and types of transactions that we completed are outlined in the chart to the right. Half of the deals we completed in 2012 were for a value of over 500,000, which is a similar proportion to We are delighted that clients continue to ask us to advise them and to take such an active part in the number of transactions taking place. This reinforces the statistics prepared independently by Experian s Corpfin in which we have been ranked top of the league table in respect of deal volume (over 500,000) in the North East for the last 4 years. Once again, the North East corporate finance community has voted us Corporate Law Firm of the Year at the Insider Dealmakers Awards for the fifth consecutive year. We are very proud that our team has been consistently recognised by the business community as being the best in the region. Investment (22) Spin-out (7) Acquisition (18) Insolvency (5) New lending (14) Reorganisation (5) Refinancing (14) AIM (3) Disposal (13) Other (3) Buyback (7) Joint Venture (2) Contents A busy year in a tough corporate market 3 A Quantum leap 4 A super bug investment 5 RPM paints its nails 5 AIMing high floats winning deal 6 Renewable sale shines 7 Safe sale strides abroad 7 Safe design beds investment 8 Takeover builds success 9 Academy achieves great results 9 Putting in 110% for the club 10 Another tasty acquisition 12 Hydrogen storage blasts off at NASA 12 Industrial sized expansion 13 Gateway to IFA growth 13 Banking and Restructuring 2012 Review 14 Bank sows seeds of growth 15 Refinancing in a cold climate 16 Fast cash injection fuels journey 16 Building is child s play 17 Student digs 18 Standing out from the crowd 19 Corporate 2012 Review 3

4 A Quantum leap We have enjoyed helping Quantum Pharmaceutical expand since we advised on the 32.5m management buy-out in Since then, they have almost tripled their staff from 130 to 320 as a result of growth and four acquisitions making them the UK s 14th fastest growing company in a Sunday Times listing - and one of the North East s most exciting businesses to work with! During 2012 we completed two further acquisitions for Quantum - Watford based UL Medicines Limited and Colonis Pharma Limited. UL Medicines is a leading importer of unlicensed medicines and batch manufactured specials. The acquisition provides Quantum with opportunities to expand into the hospitals market which it has been pursuing for some time. ULM has around 200 hospital accounts, but has just 400 product lines. This provides significant growth potential for Quantum s 24,000 lines; offering hospitals a one-stop-shop for unlicensed pharmaceuticals. Colonis Pharma develops unlicensed medicines to take them to a licensed state another new avenue for Quantum. The two latest acquisitions see the increasingly diverse pharmaceutical group now operating at six sites in the UK, including flagship and state of the art headquarters at Burnopfield, County Durham officially opened in December. The management buy-out in 2009 and Quantum s continued growth and expansion has been aided by funding from Yorkshire Bank and further investment from Lloyds Development Capital. Quantum now offers the widest range in the market and the fastest turnaround times; all aimed towards improving the patient s experience. It s clearly working because last year Quantum processed its millionth order - now it s nearing 1.5 million. We always find the team at Muckle LLP forward thinking, commercially minded and wouldn t hesitate to recommend them. They truly understand our business and the advice they provide is excellent. Andrew Scaife, Managing Director of Quantum Pharmaceutical Limited 4 Corporate 2012 Review

5 A super bug investment We advised Rivers Capital Partners on its first investment in the bio-technology industry, enabling a university spin-out to develop drugs to tackle super bugs. We received invaluable support from the team at Muckle to complete this investment. Their knowledge and expertise in working on projects like this played a major part in completing the investment smoothly and on time. Natalia Blagburn, Investment Executive at Rivers Capital Partners Rivers invested in Demuris which is developing antibiotics aimed at tackling problematic infections such as MRSA, E-Coli and Psudomonas aeruginosa. The company aims to develop new antibiotics needed to tackle multi-drug resistant strains of infections also known as super bugs. We advised for Rivers Capital, but also worked closely with Newcastle University and its equity holding company, Newcastle University Holdings Ltd, which has a stake in Demuris. It was important that we provided the right framework for Demuris within the investment, so it had the appropriate financial platform to succeed. RPM paints its nails We completed two further deals for RPM International Inc, a New York stock exchange listed multinational holding company based in Ohio, USA. RPM has subsidiaries that manufacture and market high-performance coatings, sealants and specialty chemicals, primarily for maintenance and improvement turnover was $3.8 billion, with 67% to industry worldwide and the remaining 33% to consumers mainly in North America. RPM employs more than 9,700 people worldwide and operates 82 manufacturing facilities in 20 countries. Its products are sold in approximately 150 countries and territories. In September we helped RPM diversify its markets by acquiring Kirker Enterprises Inc., a large US nail varnish manufacturer and supplier with 3 UK subsidiaries and UK manufacturing facilities. This is the first time RPM has applied its industrial varnish, paint and sealant technology to the beauty industry! Then, in November we helped Universal Sealants (UK) Limited, a RPM subsidiary based in Washington, extend its markets with the acquisition of Pipeline & Drainage Manufacturing Limited. PDM are a key supplier to another Universal Sealants subsidiary, Pipeline & Drainage Systems Limited which we helped Universal Sealants and RPM acquire in December Craig Swinhoe and his team have provided expert legal advice balanced with a sense of commercial practicality that is difficult to find in transaction lawyers. I would highly recommend Muckle to any large multi-national. John Kramer, Vice President at RPM International Inc. We were first introduced to RPM 5 years ago when we sold Birtley based Tor Coatings Limited to them. RPM enjoyed working with us on the deal, even though we were instructed by the 60+ sellers of Tor Coatings and we have worked with the team at RPM on their UK acquisitions since. Corporate 2012 Review 35

6 AIMing high floats winning deal We advised energy company, Utilitywise plc, on its admission to trading on AIM the first business in the region to join AIM for five years. Utilitywise s admission on AIM subsequently won the Deal of the Year at the Insider Dealmakers Awards Utilitywise plc is a utility cost management consultancy. It provides services to help customers achieve better value from their energy contracts, reduce their consumption and lower their carbon footprint. Utilitywise raised around 7 million as part of its admission to AIM in June and is using these funds to finance acquisitions and further develop its energy management products and services. I would like to express my thanks to the team at Muckle, many of whom worked around the clock, to complete the work that was required. Geoff Thompson, Chief Executive Officer of Utilitywise plc 6 Corporate 2012 Review

7 Renewable sale shines After working with Narec (the National Renewable Energy Centre) for many years, we helped them spin out their photovoltaic division by forming a new company: Narec Solar Limited. Narec restructured its operations to focus on developing offshore renewable technologies wind, wave and tidal. We helped Narec to structure and sell Narec Solar Limited, whilst maintaining an ongoing interest in the new company. This deal secures the photovoltaic division and safeguards jobs in that division in Blyth for the future. The team at Muckle LLP was dedicated to completing this deal quickly and making things as easy as possible for us. Their strategic guidance and legal advice was excellent. They understood our objectives. Richard Marr, Financial Director of Narec Safe sale strides abroad We helped sell the equestrian safety wear company, Airowear, to riding hat manufacturer, Charles Owen, in a strategic move to grow the business. The two businesses names and brands were retained as they work together to create the next generation of safety wear for horse riders. Airowear is best known for making body protectors to protect riders in the event of a fall and Charles Owen is a global leader in riding hat design. Airowear employs approximately 20 people in Northumberland and also has agents in Europe, Asia and Australia. Around 50% of its products are exported, with Scandinavia, Germany, Japan and Australia among its major markets. This gives the Airowear brand a huge opportunity to expand into other parts of the world, particularly in the US, where Charles Owen has a significant presence. Without your team s input it is probable our challenging deal would have floundered! In hindsight everything that you felt was important to do has proved to be absolutely correct. Lucy Carr-Seaman, Managing Director at Airowear Limited Corporate 2012 Review 7

8 Safe design beds investment We helped Rivers Capital Partners to invest in a business idea, inspired by a mother s desire to make cots safer for children. The cot design, called Kare Cot, was conceived three years ago when Katharine Paterson noticed how her daughter Evie, then six months old and very active, could have been injured or trapped by the bars of a traditional cot. Katharine discovered that many children are injured every year by getting their limbs stuck between cot bars and some even suffocate under the fabric cot bumpers that many parents believe make their child s cot safer. there are no bars, so any risk of entrapment caused by the bars of a traditional cot has been removed and as a result a cot bumper isn t needed, so there is no risk of suffocation either. An additional benefit is no more rummaging on the nursery floor in the middle of the night to retrieve soft toys and dummies which have fallen through the bars. Katharine developed a prototype that was used to attract investment from Rivers Capital, using funds from the Finance for Business North East Angel Fund. The Kare Cot should be on the market during 2013, sold through Katherine s business, So To Company Limited. The Kare Cot is completely soft sided Working with Peter Robinson and the team at Muckle LLP on this investment was a pleasure. They always work hard to ensure our investments are completed as effectively as possible for all parties concerned. Michael Dickens, Investment Executive at Rivers Capital 8 Corporate 2012 Review

9 Takeover builds success We ended a very busy year for the team by advising Stephen Rankin and his new company, TimeC 1308 Limited, on its recommended offer to acquire the entire issued share capital of Metnor Group plc. It was Stephen Rankin s intention to purchase these shares when Metnor de-listed from AIM in 2009 but he was unable to do so at that time. We advised Stephen on securing finance to enable him to set up a company to make the offer to shareholders. This also included producing and advising on the offer document, which was prepared to comply with the Takeover Code. We worked closely with Stephen and with the Takeover Panel throughout the process, to ensure that the offer was successful. Academy achieves great results We helped the largest school in the North East and one of the largest in the country convert to an Academy. We advised Kenton School in Newcastle on setting up the new company to operate the school and dealing with the transfer of assets to the company. This high profile conversion attracted a great deal of interest from the press and trade unions and we helped to manage these stakeholders whilst also advising on the employment aspects of the transfers. The transfer of the business and assets of the school was particularly complicated as Kenton School is part of a PFI arrangement with other schools and Newcastle City Council. We advised on the renegotiation of the corporate and financial arrangements with the PFI contractor and sub-contractors and the banks, to enable the school to convert. It was one of the first, and the largest, PFI schools in the country to become an academy. Working with Muckle made a complex academy conversion as straight forward as possible. Their advice was clear and comprehensive and they helped by negotiating our way with the many parties and complexities involved. David Pearmain, Headteacher at Kenton School Corporate 2012 Review 9

10 10 Corporate 2012 Review The willingness of Andrew Cawkwell and Muckle LLP to get involved and find positive solutions has been invaluable. Jenny Chapman, MP for Darlington

11 Putting in 110% for the club 2012 began with Darlington FC going into administration so our restructuring team came forward to help the Darlington Football Club Rescue Group. After months of high profile negotiations, Darlington Football Club 1883 played its first game in The Northern League on 18 August. The journey from administration to becoming Darlington 1883 was complex but resulted in the new club starting the season with the ability to pay its own way, having a clear plan for its future growth. We worked with the Rescue Group on ways to help the administrator to carry on running the club, providing support and assistance, and identifying opportunities to sell the club to third party commercial bidders, so it could be taken out of administration. The Rescue Group then formed a newly incorporated company Darlington Football Club 1883 Ltd to buy Darlington FC s business and assets. They set up a website to encourage fans to invest in the new company and raised 335,000 in just 14 days. This bought time to complete financial due diligence, organise the lease of the stadium and complete the application to transfer the rights to play football with the Football League. There were numerous difficult times and it was touch and go on many occasions and dealing with so many fans and stakeholders was a very fluid, emotionally charged situation. Hours were spent on the phone speaking to different people, managing their expectations and listening to their views. The end result is the best possible outcome for the future of the club, the fans and Darlington. Muckle LLP s team is uniquely placed to rapidly deploy specialist skills and experience to help rescue ailing businesses. Harvey Madden, partner at administrators, Taylor Rowlands accountants Corporate 2012 Review 11

12 Another tasty acquisition We always enjoy working with Craig and the team at Muckle. The commercial and practical approach they take has ensured a smooth way forward on all of our acquisitions. The team are easy to work with and ensure that we receive best advice in a clear and understandable manner. We look forward to working with them again in the future. David Brind, Finance Director at Kitwave Group We completed the third acquisition for Kitwave Limited in 18 months just before Christmas. The North East wholesaler of confectionery, soft drinks, alcohol and tobacco has acquired Teatime Tasties, a wholesaler of biscuits, cakes, confectionery and soft drinks. This deal follows Kitwave s successful acquisition of Andersons Wholesale in May 2011 and Automatic Retailing in September Teatime Tasties employs 61 staff, the majority of who operate out of its Huddersfield base, with a smaller cash and carry unit located in Manchester. It is a strong performing, well-run company that fits Kitwave s criteria in terms of operations, geography, products and customer base. Kitwave was established in 1987 as an acquisition vehicle set up to purchase the small confectionery wholesale business, M&M Value. Since then, the business has expanded by a series of acquistions. Kitwave has increased its turnover from circa 15 million in 2006 to a record-breaking year in 2012 with turnover of 155 million. NVM Private Equity invested 7.5 million in Kitwave in March 2011 to support the continued expansion. Kitwave operates from warehouses across the North of England and Midlands and the recent acquisition will bring total staff numbers across the group to 290. Hydrogen storage blasts off at NASA We negotiated the investment documentation on behalf of Cella Energy Limited, a hydrogen storage technology business, in a deal with Space Florida at the NASA Kennedy Space Centre. The deal saw 1.5 million invested in Cella by Space Florida and other independent international investors. Cella Energy is developing hydrogen storage materials which allow hydrogen to be stored without high pressure tanks. NASA Kennedy Space Center has become one of the world s largest users of hydrogen and is developing expertise in this area. The investment will be used to further develop low cost hydrogen storage technologies and expand its operations whilst creating employment opportunities both in the UK and Florida. We had excellent support and advice from Peter and the team at Muckle LLP in completing this investment deal. Stephen Voller, Chief Executive of Cella Energy 12 Corporate 2012 Review

13 Industrial sized expansion We initially worked on the management team buy-in of C&D Industrial Services Limited (now KAEFER C&D Limited) back in Since then, we have built a strong relationship with KAEFER C&D Limited and completed a number of acquisitions for the company across the UK. The company specialises in providing insulation, scaffolding and ductwork fabrication and installation for large-scale projects, predominantly in the power generation industry, new offshore platforms and aircraft carriers. In 2007 we advised seven of the company s main shareholders on the sale of 51% of the company s shares to KAEFER GmbH, one of the world s largest independent providers of industrial services based in Germany. Then, earlier this year, we negotiated the sale of the remaining 49% stake in the company to KAEFER GmbH, following many years of expansion and growth. Robert and the team have been integral to supporting the growth and development of our business. They have been an important part of the team perhaps never more so than in advising on the acquisition by Kaefer in what was quite a complex deal. Alan Green, Managing Director of Kaefer C&D Limited Gateway to IFA growth We have helped Moneygate to develop an innovative Deferred Buyout Model to enable them to acquire multiple financial advisory firms in an efficient manner. This model reverses the traditional acquisition process by focusing on the integration of the target businesses prior to completing the purchase. The target company is effectively absorbed as a franchise first and then Moneygate layers its business processes over the top. At the same time, Moneygate agrees to purchase the business, provided certain conditions are met, within a set timescale and for a fixed valuation multiple. Moneygate then work with the target company for a number of years, building profitability and streamlining it, prior to completing the acquisition. Moneygate is one of the UK s fastest growing independent financial advisory companies, advising on client assets of over 1.75 billion. It has seen turnover increase from 5m to 12m in the past year and, over the next twelve months, is aiming to increase turnover to 25 million. Muckle was involved with us from the start. They formed an acquisition model which works in the real-world and which fits within our future plans. Muckle helped us go from concept to finished solution quickly so that we can get on with doing deals. Lee Hartley, Chief Executive of Moneygate Corporate 2012 Review 13

14 Welcome to our Banking and Restructuring 2012 Review The last twelve months have been even busier than 2011, especially during the second half of the year. It would certainly appear that the funding for lending scheme has kick started additional activity, which can only be good news for the region and the economy in general. The consensus among lenders is that they are willing to lend to a range of borrowers. However, there is general recognition that property transactions are difficult to fund unless they are linked to a trading business. Certain sectors such as agriculture, automotive and manufacturing have experienced a lot of activity. We have helped a number of borrowers fund their corporate transactions and also on refinancings. We have also acted for a number of lenders including Bibby Financial Services Limited, HSBC Bank plc, Lloyds TSB Bank plc, Svenska Handelsbanken AB (publ), Santander UK plc, The Royal Bank of Scotland and Yorkshire Bank. There are, undoubtedly, still a number of businesses in the distressed section of the market and we have been working with them to assist directors in their decision making and in some turnaround situations. We are also finding a number of transactions where the funding requirements need a blend of finance from a range of providers, not only traditional banks and building societies, and we believe that we will see a lot more of this in the future. 14 Corporate 2012 Review

15 Bank sows seeds of growth We advised Lloyds Bank Commercial on a combination of term loan and overdraft facilities to industrial and provident societies Coastal Grains Limited and Coastal Grains Marketing Limited. As Northumberland s largest grain operative, Coastal Grains are also the largest co-operative central store outside East Anglia, with over 100 farmers being members. This was a unique transaction, involving reviewing contracts, implementing security and providing a legal opinion. Corporate 2012 Review 15

16 Refinancing in a cold climate We advised the aviation de-icing and anti-icing manufacturer, Kilfrost, on its new finance arrangements with RBS who provided a combination of inventory and invoice finance facilities to Kilfrost Limited in the UK and Kilfrost, Inc in the United States. Kilfrost has its manufacturing base in Haltwhistle and is experiencing rapid international growth, particularly in the US and China. We are constantly looking for new and emerging markets where our expertise gives us the edge. Muckle LLP successfully assisted Kilfrost to secure a new finance arrangement which will enable us to meet the growing demands for our products overseas. Gary Lydiate, Chief Executive Officer at Kilfrost Limited Fast cash injection fuels journey We advised Santander UK plc on a term loan, overdraft and trade finance facilities to S.G. Petch Limited, one of the North East s leading multi-franchise car dealerships. The transaction involved taking security over various dealership sites, from Richmond to Durham. The deal was completed in early December in a very quick timeframe. We worked very closely with Muckle to ensure the tight timescales could be adhered to and were exceptionally pleased with the professional team approach received from Louise and the team. They provided dedicated resource to ensure this timeline could be achieved, which also helped to further enhance our relationship with S. G. Petch in this multi-million pound transaction. Graham Moore, Corporate Relationship Director at Santander UK plc 16 Corporate 2012 Review

17 Building is child s play We advised the nursery group, Childcare Enterprise, on the banking, construction and property aspects for building Brunton Day Nursery at Newcastle Great Park. Development facilities were obtained from Santander UK plc. The nursery was completed and opened in September 2012 to care for 66 children aged from birth to 5 years. The nursery has been designed to provide plenty of natural light with large windows and each room having access to the outdoors. The directors of Childcare Enterprise influenced the design after being inspired by the good practice aesthetics in Norway, following a visit a few years ago. I have been delighted with the service, advice and support received from Muckle LLP. Julia Wilcock, Managing Director of Childcare Enterprise Limited Corporate 2012 Review 17

18 Student digs We acted for Metnor Group on all banking, construction and property aspects of the first phase of its Portland Green development which is currently under construction. Portland Green Student Village will house up to 278 students from August 2013 in a range of 4 to 7 bed student apartments in Shieldfield, near to Northumbria University. Muckle have been working with Metnor over the years on a variety of projects. They deliver a personal, detailed and diligent service to ensure the desired outcome is achieved as smoothly and efficiently as possible. Gerald Hall, Technical Director at Metnor Property Group 18 Corporate 2012 Review

19 Standing out from the crowd Many law firms treat clients well, but we re recognised as being better at it and it s always rewarding when others in the business community applaud what we are doing. Best law firm outside London In June 2012, The Lawyer named us as being the best law firm outside London when we won the Regional Law Firm of the Year title. WINNER Regional Law Firm of the Year Judges were impressed by our commitment to the North East, whilst continuing to win national and international work. One of the judging panel members awarded Muckle full marks for its impressive financial performance coupled with a strong commitment to social responsibility projects, focusing on making a contribution to the community. The judges said that Muckle sets an example not just at the regional level, but at a national level too. Corporate Law Firm of the Year We have won at every North East Insider Dealmakers Awards during the past six years was no exception, with the firm winning Corporate Law Firm of the Year for an unprecedented fifth consecutive year. Deal of the Year We also advised on the Deal of the Year at the Insider Dealmakers Awards, in listing Utilitywise plc on AIM. This is the first business in the region to join AIM for five years. These awards are just some of the accolades which recognise Muckle LLP s success. We won the Heart of the Community Award at the North East Business Awards 2012 in recognition for our work in helping local communities. We were named Law Firm of the Year at the Newcastle Law Society 2012 Legal Awards. We also won The Law Society - Legal Sector Alliance Award 2012 for Excellence in Environmental Responsibility. Corporate 2012 Review 19

20 Corporate Robert Phillips Head of the Corporate Team Hugh Welch Senior Partner Andrew Davison Partner Tel: Mob: Tel: Mob: Tel: Mob: Banking & Restructuring Louise Duffy Head of the Banking & Restructuring Group Andrew Cawkwell Partner Tel: Mob: Tel: Mob: Time Central 32 Gallowgate Newcastle upon Tyne NE1 4BF Tel: Fax: Certificate No. EMS