Though the coronavirus pandemic led to a drop in M&A activity, certain sectors such as technology, healthcare and financial services have remained strong. With record amounts or private equity capital ready to deploy, buyers are more cautious, and sellers remain hesitant for fear of selling at near-bottom prices or starting deals they can’t get over the finish line.
In the current landscape there has been an increase in public-to-private transactions by UK listed companies, while many British companies have chosen to raise capital to protect their balance sheets and stabilize working capital and liquidity positions, and a number of new EU regulations and proposals are putting up even more obstacles for companies looking to do deals. On the governance front, ESG continues to be top of mind for investors, but with a shift toward the social issues brought to light during the pandemic. Will the recovery lead to a new set of corporate vulnerabilities centered around how the world has changed and how companies are positioned, and open the door for activists to return to the European markets?
Join The Deal and a roster of senior corporate executives, private equity and institutional investors, and corporate advisers for The Deal Economy UK. This virtual event features two days of online sessions exploring the effects of Covid-19 on dealmaking in Europe and the opportunities, obstacles and risks dealmakers face in the current environment and how to navigate through them. Your registration provides access to all of the sessions. View them live as they happen or on demand at a time that is convenient for you.
Rowena joined 3i in 2007 and is based in London, focusing on originating, executing and representing 3i on the Boards of Private Equity investments. She has been involved in 3i’s investments in Audley Travel, Aspen Pumps and Phibro Animal Health, and the sale of Centrul Medical Unirea to Advent International. Rowena currently sits on the Board of Audley Travel.
It’s not surprising that the impact of the coronavirus pandemic has led to an overall drop in M&A activity, but despite the current economic challenges, certain sectors such as technology, media and telecommunications and financial services have remained strong. Although dealmakers are far more cautious and selective, market sentiment has started to change. Buyers are looking to take advantage of opportunistic acquisitions, and record amounts of private equity capital needs to be deployed. How is transaction volume, deal terms, valuations and pricing being affected by the current market volatility? Will we see an increase in distressed M&A in sectors most affected by Covid-19? What considerations are being used when crafting Material Adverse Effect provisions in light of the global pandemic?
Moderator: Lisa Botter, London Bureau Chief, The Deal
Panelist: Mark Corbidge, Managing Director, Transactions, Sun European Partners, LLP
Panelist: Rowena Gracey, Director, UK Private Equity, 3i
Panelist: Merrick McKay, Head of Europe – Private Equity, Private Markets, Aberdeen Standard Investments
Panelist: Tristan Nagler, Managing Director, Aurelius UK
Panelist: Dan Oates, Partner, Fried Frank
Panelist: Daniel Sinclair, Partner, Ares Management Corporation
As companies across the globe continue to cope with the coronavirus pandemic, many have chosen to raise capital to protect their balance sheets and stabilize working capital and liquidity positions. Has this opened the window for private equity firms looking to deploy capital? Many portfolio companies may be coming back for more because they’ve been unexpectedly successful. Digital based businesses have seen accelerated growth, but is it sustainable once traditional retail reopens? This panel will discuss how investors and companies are managing the valuation gap caused by current market conditions and explore some of the clever structures being used to get deals done. Panelists will also explore the funding gap between Enterprise Investment Schemes, and Seed Enterprise Investment Schemes, which are tax efficient vehicles for very small investments, on the one hand – those that are big enough to attract institutional investors, on the other.
Moderator: Jonathan Braude, Senior Writer, The Deal
Panelist: Molly Alter, Principal, Index Ventures
Panelist: Rachel Marshall, Principal – Private Equity, True
Panelist: David Peerless, Director, Boustead Capital Markets
As the financial markets continue to deal with the global pandemic, and volatile valuations across both public and private markets, many companies have been forced to look inward and explore options to stabilize their businesses. The combination of reduced share prices, record-low interest rates and private equity sponsors with an abundance of dry powder to deploy has shifted the investment landscape from a pre-Covid seller’s market to a buyer’s market. This shift has resulted in an uptick in public-to-private activity. On the other end of the spectrum, companies are exploring SPAC transactions which are being launched by private equity sponsors. SPACS, which are designed to take companies public without going through the traditional IPO process, and allowing retail investors to invest in high growth companies earlier in their growth life cycle while providing private equity and venture firms an alternative exit strategy. This panel will examine what is driving these trends, what the pros and cons, risks, and due diligence practices companies and sponsors should keep in mind when considering these transactions.
Moderator: Kyle Fox, Partner, KRF Capital
Panelist: Oliver Haarmann, Founding Partner, Searchlight Capital
Panelist: Matt Skurbe, Senior Managing Director, COO and CFO, CC Capital
Panelist: Matthew Turner, Senior Industry Expert, Triton Partners
In an industry that was already under pressure before the Covid-19 pandemic, retailers across Europe are now dealing with bankruptcies, failed mergers and volatile valuations. An accelerated shift to online shopping and a slowdown in tourism has put renewed scrutiny on the operations of Europe’s largest retailers, and they have been forced to preserve cash and evaluate their liquidity. How is the Commercial Real Estate market being affected by their retail tenant’s inability to pay rent? What industries are integral to supporting the retail sector during the recovery, and how are they contributing to current deal flow? What does the future of retail and M&A in the retail industry look like?
Moderator: Nikitha Sattiraju, Reporter, The Deal
Panelist: Ertan Enginalev, Founder & Managing Partner, WSD Capital Management
Panelist: Cynthia Jamison, Chairman, Tractor Supply Company; Director, Darden, Inc., Office Depot Inc., Big Lots Stores, Inc.
Panelist: Diane Rochereau, Associate Partner, EY-Parthenon
Panelist: Mary Wallace, Retail, Consumer Behaviour & Place Executive, IBM Services
The turmoil around Covid-19 has created opportunities for engaged shareholders as company valuations have tumbled and some management’s inability to deal with crisis have become apparent. ESG continues to be top of mind for investors, but with a shift away from the governance aspects and more toward the social issues brought to light during the pandemic. The recovery will lead to a whole new set of corporate vulnerabilities centered around how the world has changed and how companies are positioned. What are their weaknesses? Are old business models outdated? How did companies fair in comparison to their competitors during the recovery? Perhaps activists are sitting on the sidelines ready to pounce. This panel will explore the changing face of shareholder activism in Europe and discuss what we can expect from activists as they are surely seeing opportunity on the horizon.
Moderator: Ron Orol, Senior Editor, The Deal
Panelist: Michel De Fabiani, Chair of Policy Committee, The European Confederation of Director’s Association; Vice-President, Franco-British Chamber of Commerce & Industry
Panelist: Michael Herskovich, Global Head of Corporate Governance, BNP Paribas Asset Management
Panelist: Till Hufnagel, Partner, Head of Activism, Petrus Advisors
Panelist: Patrick McHugh, Co-Founder and Senior Managing Director, Okapi Partners
Panelist: Eric Sibbern, Senior Partner and Managing Director, Veraison Capital AG
Shareholders and management teams at the world’s largest companies aren’t the only ones invested in sustainable practices to reduce carbon footprints. The earth, an often-overlooked stakeholder in global commerce is perhaps the one with the most to lose in the fight against carbon emissions. How are companies attracting investment and support from shareholders in a shift toward more eco-friendly and sustainable practices? How do companies shift toward carbon-neutral and sustainable practices without severely sacrificing profits? As the recovery continues will we see a renewed emphasis on companies reducing their carbon footprint and promoting environmental sustainability?
Moderator: Paul Whitfield, Journalist, The Deal
Panelist: Anne-Sophie d’Andlau, Managing Partner, Co-Founder, CIAM
Panelist: Gianluca Ferrari, Founding Partner and Chief Investment Officer, Clearway Capital
Panelist: Mauro Roversi, Partner and Chief Investment Officer, Ambienta
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In September 2022, the deals and dealmakers shaping the Deal Economy will be celebrated in the latest installment of The Deal Awards. In line with its mission of providing forward-looking intelligence across mergers and acquisitions, private equity, activism and restructuring, the Awards seek to recognize and celebrate the advisers, firms and banks driving the market forward.