CLAIRFIELD ANNUAL OUTLOOK 2020 - Clairfield International
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
CLAIRFIELD ANNUAL OUTLOOK 2020
Letter from
300+
TEAM MEMBERS
80%
OF OUR MANDATES ARE
6
SECTOR TEAMS
the chairman
INTERNATIONAL OF SPECIALIZED
EXPERTISE BACKED BY Celebrating 15 years
22
COUNTRY TEAMS
30%
OF OUR DEALS ARE CLOSED WITH
70
INDUSTRY
supporting our clients in
the middle market Contents
ACROSS THE WORLD INTERNATIONAL BUYERS ADVISORS
This year Clairfield celebrates 15 years as trusted advisor of our clients in M&A. Celebrating 15 years of M&A
Since our establishment by four M&A boutiques in 2005, we have grown to A look back at our biggest milestones 2
34 offices worldwide in 22 countries. We have continued to enhance our core
Reflections on 15 years of M&A 4
capabilities for crossborder transactions and have advised on more than EUR 50
billion in aggregate deal value. We are proud of our industry expertise and our Environmental, social, governance 8
ability to leverage our international access to the advantage of our clients. 2019 Purpose and profit 9
was a record year for Clairfield after a record 2018, positioning Clairfield firmly
among the top 10 firms in Europe and in many markets in the top five. Celebrating 15 years of serving clients
Corporate sellsides 12
We look back on a good year for M&A despite geopolitical ruffles. Increased
investor skepticism, an uncertain international outlook with regard to Europe Corporate buysides 13
and China, and mixed earnings results from corporations over the past year all Private equity 14
M&A advisor of choice contributed to perceived volatility. At the same time, low interest rates, strong
balance sheets, and the steadiness of economic indicators such as consumer
sentiment contributed to transaction activity. Equity markets have risen to all-time
Family businesses
Opening doors in Asia
15
16
for midmarket clients
Capital Solutions 17
highs in spite of political uncertainty.
In 2019, Clairfield International maintained growth and continued to provide Celebrating 15 years of sector expertise
and transactions clients with the highest quality of service in corporate finance. We successfully
advised on over 130 transactions in 2019, continuing to execute strategies across
all sectors for our clients to create value. We were joined by new partner firms in
Business services
Deal spotlight and selected transactions
20
21
Sweden and the Netherlands who bring access to vibrant areas in Europe as well Travel and education: sectors that evolve and enrich 22
as middle market and private equity specialisms. We also enhanced our services
with the establishment of a Capital Solutions practice group, formally bringing Consumer & retail 24
together our worldwide expertise in capital raising and equity/debt advisory in Deal spotlight and selected transactions 25
order to provide our clients with the best access to financing sources. We are Market dynamics are changing the food world 26
delighted by the progress in attracting young talent and the Clairfield Academy
program, and what it offers to our young professionals. The need for continuous
learning affects all of us as digitalization and artificial intelligence changes our Energy, cleantech & resources 28
clients’ business models and our own advisory business, reinventing best practice Deal spotlight and selected transactions 29
Clairfield International was founded in 2005 by four European M&A boutiques and has since and lifting one’s skill set to a higher level. Towards a low-carbon future 30
expanded to encompass all major economies worldwide in 22 countries. In our Outlook 2020 this year, we discuss the past 15 years in M&A, the challenges
and opportunities facing various industries, and how we can provide the best Healthcare 32
strategic solutions to create value and promote growth in this climate. We look Deal spotlight and selected transactions 33
While Clairfield International continues to grow with the addition of knowledgeable partners in key at stimulating and challenging issues with contributions on impact investing, ESG, Digital health: from buzzword to solutions 34
and digitalization. We look at where we have been and where we are going as a
markets, we are determined to preserve our strengths – entrepreneurial spirit, local expertise, firm, advisor, and fiduciary to our clients. Our industry experts weigh in on what
Industrials 36
industry know-how, and close bonds among all team members spanning the globe. threats and opportunities face the market and M&A in the coming year, and we
Deal spotlight and selected transactions 37
thank them for their thought-provoking contributions.
Legacy turf leader reinvents the industry 38
On behalf of the board and all of us at Clairfield, we thank you for your commitment
to Clairfield, and hope that you find value in this publication. We look forward to
Top 10 Top 20 130+ EUR 20 billion
Technology, media & telecom 40
working with you, our clients, as we strive to develop Clairfield to an ever higher
Deal spotlight and selected transactions 41
level. Here’s to the next 15 years in M&A.
Cloak and dagger for the digital age 42
IN EUROPEAN IN WORLDWIDE DEALS CLOSED CUMULATIVE DEAL
MIDMARKET RANKINGS MIDMARKET RANKINGS ANNUALLY VALUE LAST 5 YEARS Contact information 44
Alexander Klemm
www.clairfield.com Executive Chairman
aklemm@clairfield.com
1
OUTLOOK 2020
These founding firms are
joined by Germany.
Clairfield Partners is registered “This transaction, worth over
Recently formed M&A advisory firms in as a holding in Geneva, USD 650 million, was the largest
France, Italy, Spain, and the US begin to Switzerland. outbound US deal Coca-Cola had
collaborate. They decide to form their acquired the German done at that time. It was actually 20
own midmarket partnership and call
bottler business from simultaneous transactions, and was
20 separately-owned certainly the most complicated my
it Clairfield Partners to emphasize the companies
team had ever undertaken.”
A look back at our
transparency and honesty that forms New partner in Belgium. Albert Schander
the basis of their practice.
2004 2005 2006 2007
biggest milestones
New partner in Australia.
Boom in worldwide The iPhone goes on
M&A activity that lasts the market and the
until 2008. smartphone era truly 2008 is a banner year for
begins.
Clairfield, as with a small
number of partner offices, we
“We coordinated in-depth are ranked by the Thomson
audits to reassure the
French buyers, and 2008 Financial league tables as one
of the top 25 financial advisors
structured the deals with in Europe, Australia, Benelux,
Clairfield expansion begins in earnest With clean energy a cornerstone
the stakes growing larger “No Distance Too Far” is the motto for our France, Germany, Italy, and
with new partners in Brazil and Poland. of economic recovery, Clairfield
over several years, with meeting in Sweden. Five Clairfield athletes cross Spain.
New partner in the UK. We soon cover every important closes six deals in the sector in Lehman Brothers collapses.
incentives.” the finish line at the Stockholm half-marathon,
economy worldwide. a 12-month period. The worldwide financial crisis
Thierry Chetrit cheered on by the rest of the team.
begins with repercussions
Two French-
Brazilian deals 2010 2009 for M&A.
closed in 2011, acquired a majority
the first of many stake in
was sold to
between these
countries.
“Most of our deals are crossborder
and show the strength of the
Mexican midmarket, which is
2011 “The addition of this facility is
a big step in reaching ENEA’s
Clairfield’s focus and passion.”
Pablo Coballasi
Partner Sharon Doyle becomes non executive
director at Social Investments Australia.
strategic goal of operating Clairfield sponsors the
acquired “Among various board positions I have
250-350 MW wind power Clairfield strengthens our position in the Americas 2014 M&A forum at
generation plants by 2020. ” Bardy Wind Farm with a Mexican partner and in the Nordics with a had, I want to use my expertise at this the China International
Clairfield establishes a Norwegian partner. impact investment fund.” Fair for Investment and
Piotr Kolodziejczyk presence in Hong Kong. Sharon Doyle Trade (CIFIT) in Xiamen.
Arab
Spring 2012 2013
Brand overhaul, with New partner in Finland.
renaming of brand to
Clairfield International,
new logo, and new look.
“This deal shows our strength in
New partner
the automotive sector and also the
interest by US public companies in New leadership to define and drive Clairfield consistently ranks in Denmark. 2014
European manufacturing.” strategy in coming years. among the top advisors for small
was sold to
“I joined Clairfield to help drive the and midcap transactions in major “We have advised Alma Media, a
Clairfield workflows effort to achieve a more integrated league tables. Clairfield Nordic is Helsinki-listed media company focusing
New partners in Austria, on digital services and publishing, on eight
organized around six and ever more successful firm.” ranked number 1 in the region.
Hungary, and Israel. successful crossborder M&A transactions
sector groups to pool Alexander Klemm
Giuseppe R. Grasso on both the buy and sell side.” sold Alma 360
expertise.
China becomes the second to
Brexit
referendum 2016 largest source of outbound foreign
direct investment and recipient of
2015
inbound investment. Juha Raunio
established a
Clairfield celebrates
2017
acquired strategic alliance
was sold to was sold to
with 15 years since founding.
Capital Solutions group formed
to assist companies in all stages
“This deal was the culmination Clairfield ranked #1 in China desk established as propietary of the life cycle. Hans Buysse
was sold by of our relationship with ADB High Technology in the Niche and not so niche specialisms: top advisor on resource for accessing Chinese corporates, leads the group of international
through various sale processes.” Refinitiv league tables. Nordic music festivals and e-payment. investors, and political entities. specialists.
2018 2019 2020
Digitalization and Artificial
to Intelligence set to be the
next business disruptors.
Bertrand Hermez We look forward to delivering value to
Clairfield expands with new Dutch
New partners in Canada and Turkey. our clients for many more years to come.
and new Swedish partners.
2 3
OUTLOOK 2020
Reflections on Volume and value of mergers &acquisitions worldwide, 2005-2018
15 years of M&A
60,000 4,500
4,000
50,000 3,571
4,284 3,449
3,322 3,500
Value of transactions (in EUR billion)
3,178
40,000 3,288 3,000
Number of transactions
We asked our partners what has changed most in 2,249
2,091
3,000 2,500
M&A since 2005 and found themes that resonated. 30,000 2,049
1,902 1,949 1,900
2,000
1,573
20,000 1,500
1,000
10,000
Brian O’Hare is a founding partner of Clairfield 500
Spain and Clairfield International. He has advised 36,025 41,407 47,455 45,173 40,710 43,200 42,578 40,362 38,651 42,950 47,155 49,014 52,422 51,865
transactions in real estate, healthcare, business 0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
services, financial institutions, and transportation,
among other sectors. Brian is a frequent commen- Number Value Source: FactSet
tator on M&A and international business. He is cur-
rently first vice-president of the American Chamber
of Commerce in Spain and is a member of the
Institute of Venture Capital in Spain. Brian serves
on the board of directors of Clairfield International.
Increased activity across the globe fine print may have changed little). With so much firepower at the
ready, private equity funds will surely continue to play a significant
Global M&A activity increased from 32,000 transactions in 2004 to role in providing the M&A market with much-needed activity.
47,000 in 2018, an increase of 46%. Deal value has almost doubled
Filippo Guicciardi is a founding partner of Clairfield from USD 2.1 trillion to USD 4 trillion. These are strong growth
Italy and Clairfield International. He specializes
in M&A processes in the textile, pharmaceutical, figures in both cases and a clear sign that M&A is here to stay as a Globalization
mechanical engineering, logistics, and machine- strategic tool for management and shareholders alike. Crossborder
Globalization is now a fact of life for companies both large and
tool sectors as well as the private equity industry. deals have also increased in deal number from 9,000 to 14,000 and
He is a founding member of “Tavolo M&A” of small. Since 2004 global trade of goods and services has more than
in deal value from USD 600 billion to USD 1.5 trillion (estimated,
AIFI, the Italian Association for Private Equity and doubled to USD 25 trillion and is now equal to 30% of world GDP.
Venture Capital. Filippo serves as CFO of Clairfield due to confidential deal values).
Globalization has impacted every entrepreneur, who must have
International. critical mass in order to compete in the global market. The typical
Private equity family-owned business is now too small to compete globally and they
must decide if they grow, or if they morph into a defensible niche
Private equity has matured a great deal since 2005. In 2004 there player. This is a very strong motivation for them to talk about M&A.
were, by some accounts, just over 1,700 private equity funds active Clairfield now sees family-owned or owner-managed companies
S
in the market. This figure has grown to more than 5,400 at the who would never have dared to undertake an acquisition 15 years
ince the founding of Clairfield Partners in Geneva in 2005 (now end of 2018, creating many more specialized and niche players. ago putting it on their board agendas. They have realized what the
named Clairfield International), the mergers and acquisitions During the same period, assets under management have ballooned large, listed corporates have known for some time: that M&A is a
market has remained robust. Both the number and volume of from USD 700 billion in 2004 to USD 3.5 trillion in 2018, a fivefold key strategic tool that enables them to rapidly reach their strategic
deals closed continue to be cyclical over the years, reflecting the increase, with an astonishing USD 2.4 trillion of dry powder yet to objectives and maybe even thwart the plans of a “dear” competitor.
opportunistic nature of M&A. The main issues that our sell-side be deployed. In 2005 private equity accounted for just over 1,800
clients address with an M&A deal continue to be a lack of succession, deals for a total value of just over EUR 300 billion while it accounted
a need for liquidity and estate planning, refocusing on core for more than 3,000 deals and EUR 380 billion in 2015. In the years A generational question
business, and, in some cases, differing views among shareholders. in between, totals exceeded 4,000 deals and more than EUR 415
On the buy-side we see a need for M&A for the following primary In post-WWII Europe, most entrepreneurs were interested in
billion in value depending on the year.
reasons: the need for inorganic growth to achieve strategic goals, creating a family-owned company that would be revered and have
requirements to strengthen presence in markets or segments, or Private equity funds invest in growth industries, industries in need a prominent place in their community. They were reluctant to sell
to participate in the consolidation of a market. Additionally, the of consolidation, and buy-and-build platforms, leading to increased and afraid of what people might say about selling out, especially
coming of age of private equity funds means that there is also a M&A activity. Specialization has also led to a tiered universe of PE in the event of plant closures that could eventually affect their
segment that simply needs to find a home for its investment euros funds: large cap, mid cap, and small cap (to keep it simple) that communities. A good deal of their decision making was emotion-
or to rotate its portfolio. invest in deals from EUR 1 million in enterprise value to more than based. These first-generation business owners are now well into
EUR 10 billion in enterprise value. It is also interesting to note that old age, may not have a successor, and need to think about the
As part of our celebration of Clairfield’s 15th anniversary, we between 2006 and 2017 while the number of listed companies in long-term stability a new owner can give to their employees and
surveyed our colleagues throughout our worldwide offices and the developed market fell by 16%, private equity funds increased clients. But things have changed for family-owned-and-operated
asked them one simple question: what has changed most in M&A their portfolio of companies by 106%. businesses in the last fifteen years. The younger generations, now in
in the last 15 years? We received much more material than we their forties to sixties, are more knowledgeable about their markets,
expected and consequently had to choose what we considered to be As a result of all the activity, private sellers understand PE better understand the challenges moving forward, how partnerships can
most relevant to include in this article. The following points reflect than 15 years ago. Gone is the image of Gordon Gekko looking to make businesses stronger, and why taking on a financial investor
the views of many senior partners who have been serving clients flip a family-owned company to make a mint. Private equity has could be the right move. They are much more open to rational
over the last 15 years or more in some of the hundreds of deals our generally embraced a more low-key, warm and friendlier approach decision-making based on the merits of the case. We might even go
partner offices have advised on since 2005. looking to “partner” with families or management (even though the so far as to say that in 2005 entrepreneurs did not talk about M&A
4 5
OUTLOOK 2020
in the ordinary course of business, but now it is a topic on every making it an anxiety-inducing experience for the sellers. The locked- liabilities. Such a real guarantee typically takes one of three forms: listing that damages the value of the shares of bonds. Due diligence
entrepreneur’s agenda, both on the sell and buy sides, at an early box method allows for “leakage”, amounts usually paid on behalf or retention of purchase price, creation of an escrow account, or a bank became standard practice for acquirors in the successive waves of
stage of company history. to the sellers, and are generally identified and well known at closing. guarantee, all subject to a complex claims mechanism and a time M&A involving private companies. The acquiror would undertake
Price certainty at closing alleviates much of the nervousness that limit. Over the last 15 years the insurance industry has developed and pay for the due diligence investigation, drafted for its sole
surrounds an M&A at closing and, as a result, the locked-box method an insurance product to replace these types of guarantees so that benefit, and would ask for exclusivity in exchange for undertaking
Technology is increasingly popular with sellers who want to sleep better at night the sellers can collect the price at closing and not have to worry the expense in time and resources. In the 2000s, audit firms began
Technology has revolutionized many aspects of our lives as private up to, and beyond, deal completion. about a phone call from their lawyer informing them that there has to sell a service whereby a seller could conduct a due diligence on
citizens. It is no less true that technology has impacted how M&A been claim. The insurance is not cheap, but peace of mind never itself, hence a “vendor’s due diligence”, and effectively “sell” it to
processes are structured and managed. Email and word processing is. Private equity funds like the product because the clean break the buyer. This change in procedure meant that the seller did not
R&W insurance means post-closing is easier vis-à-vis their limited partner investors. have to give exclusivity until approaching the closing thus allowing
technology have sped up contract negotiations (in 2005 faxes were
still common). Cloud services have made due diligence less intrusive When sellers divest, they typically have to guarantee that there are R&W insurance is here to stay. the seller, and their advisors, to run auctions until virtually the day
and more complete, and on-site data rooms are a thing of the past. no hidden or unrealized liabilities in the financial statements. The before closing and ensuring a higher sale price in the process.
Technology means that geographic distance will not necessarily sellers make a representation (the “R”) that there is no undisclosed
liabilities and provide a warranty (the “W”) that should any liability
Vendor’s due diligence
place a buyer at a significant disadvantage. While a phone call or a
video conference will never replace on-site management visits, high- come to light post-closing, they will pay for it. This means that Due diligence has been around in one form or another since people Seller-friendly process
quality video conferencing enables buyers and sellers to develop a they must indemnify the buyer in the sales & purchase agreement have been doing business. When a company goes public or lists Back in the 1990’s the guy with the money laid down the rules in
trusting relationship more quickly with more frequent “face-to-face” which they sign at closing. Oftentimes, as an “insurance” policy the a bond offering, the coordinating investment bank conducts due M&A deals. But with the rising sophistication of the M&A process,
interactions but without the travel. buyer will require a real guarantee against identified but unrealized diligence at the risk of being liable if things are found after the sellers are more in control of what is acceptable and how things
will be done. The process is drafted by the seller and their advisors,
management meetings are used to get buyers comfortable with the
Information availability business and its management, timetables are set by the sellers,
The advent of the internet means that more information is available increasingly sellers are drafting SPA’s early in the process, and R&W
at all times, though guidance is needed to make sure it is the right clauses are lighter than ever. This is largely possible because of the
information. As an old professor used to say, “questions are great, increased number of bidders—specifically private equity firms who
but the right questions are even better.” Due diligence can be are not competitors of the business and can gain valuable access
conducted faster and more securely. Identifying potential buyers, to key information. Clairfield has seen how the sale process has
investors or targets no longer requires access to proprietary or evolved in favor of the sellers over the last 15 years and we think
expensive databases. Additionally, competitive analysis has become that there is no turning back.
deeper and more complete, resulting in better and timelier decision
making on both sides of the negotiating table. Information on deals Use of M&A advisors
and transaction structuring is more widely available, ranging from
EBITDA and other multiples to terms and conditions in an SPA, In the past, the seller would seek a brand name or local bank to
leading to clearer market standards. sell their company because they did not know that any alternative
existed. This would lead them to choose a Tier 1 bank, but they
ended up working with the B or C team at the bank and did not
Convergence between Europe & North get the appropriate attention, oftentimes leading to disappointing
America in M&A practice results for the client. Such results offered a window of opportunity
for experienced, entrepreneurial corporate financiers looking to
Executing M&A transactions in Europe and North America continues
exit the stodgy and highly regulated corporate banking environment
to have basic differences but we have seen convergence over the
to set up independent corporate finance advisory businesses based
last 15 years. Some key differences, such as asset versus share
on real nuts-and-bolts M&A expertise and a desire to provide top-
deals (the latter more common in Europe), are related to tax codes
flight service to all clients regardless of size. These firms avoid
and concern liability and responsibility issues. SPAs in Europe have
the trappings of multiproduct integrated financial institutions.
started to look more like their North American counterparts in
Boutique M&A advisors have flourished and multiplied since 2004
the last 15 years in spite of the fact that most European civil code
across all major developed markets in Europe and the Americas.
provides more protection to both parties even without voluminous
As a result of all these developments, today’s clients are more
R&Ws. R&Ws seem to follow similar patterns now on both sides
savvy. Family-owned and owner-managed businesses have become
of the Atlantic albeit with slight differences based on transaction
much more knowledgeable about corporate finance and are better
specific issues. The aggressively litigious US environment continues
advised before a sale process starts. Clients also tend to be more
to make R&Ws more important. R&W insurance and locked-box are
demanding when selecting an advisor because of the number of
probably more prevalent in Europe. Non-compete, non-poaching
advisors active in the market. Clients want to understand what
and non-solicitation are all now standard operating procedure in
deals the advisor has done in their sector, average deal size, and
SPAs and readily accepted by sellers.
incentive-based success fees to determine whether an advisor is
the right fit. Clients wants to know the extent to which the advisor
Sources: Clairfield research, Preqin, Pitchbook
Locked-box vs. completion accounts does global transactions but are reassured that they can contact
someone local (and in their native language) when issues arise.
We have seen a pronounced rise in European M&A in the use of the This means that advisory firms have had to develop, focus on, and
“locked-box” method to handle the final purchase price adjustments market their USPs to differentiate themselves from the crowd with
instead of the more traditional completion accounts approach. Post- such things as sector focus, international presence, and proven
closing price adjustments create nerve-racking anxiety for most track record.
sellers. Most of these adjustments are related to the amount of
working capital delivered at the closing date. As many mid-market Many of Clairfield’s offices were young or only recently founded in
companies will have little experience in estimating working capital 2005. Many of our partner firms are now recognized as among the
at closing, which may occur at a date different than the end of the most established midmarket firms in their respective markets. At
month, sellers get nervous about “getting it wrong” and having the end of the day, this means that it is far easier to gain access to
to return part of the purchase price to the buyer. The completion companies; when we call them with an idea, they answer. Now we
accounts approach can also take several months to conclude, thus have a history of success to build on.
6 7
OUTLOOK 2020
Environmental,
social, governance Purpose and profit
The changing definition of what Impact Partners improves communities by supporting
it means to be a great business social entrepreneurs
Bettina Gereth is an impact
investing consultant and
senior advisor of Clairfield Mathieu Cornieti is the CEO of Impact Partners,
specializing in corporate a European social-impact private-equity fund with
responsibility. EUR 110 million in assets under management.
E
nvironmental, social and governance banks. To mitigate the risk of these direct needs that other companies have not done. also use them as KPIs to measure and report on The banlieues, troubled urban districts of Paris, attracted international attention in 2005
(ESG) – why has this become such a equity investments they often contribute their Despite the initial investment, being a first the progress of their portfolio companies. Not when a former French president said he wanted to clean up these unruly districts with a
huge investment topic lately? own technology and product know-how to mover in a market with untapped customer surprisingly, some of the largest global private Kärcher high-pressure hose. The banlieues are also home to some incredible entrepreneurs
The topic of ESG investing started with a those social business start-ups. This type of groups is often a wise strategic move equity firms have already raised impact funds. who play a vital role in creating employment among those most in need. Unfortunately,
letter. In 2004, the former UN General Kofi CSR project resembles venture philanthropy leading to long-term profitable growth. TPG, for instance, has raised the largest global their limitations dictate a much more challenging path to receive support to grow their
Annan invited over 50 CEOs of major financial addressing social challenges while supporting • Identify and invest in new products or private equity impact fund (USD 2 billion) to date businesses. As a social investment fund, we make providing that support and financing
institutions to join the World Bank‘s initiative, business reputation and growth. business models with a clear ESG/SDG and is about to raise a new USD 3 billion fund. This one of our priorities.
designed to integrate ESG into capital markets. More companies, no matter their size, begin to focus that open up new geographic or year, KKR topped the USD 1 billion fundraising Clearly any action that supports the creation of employment in these disadvantaged
Kofi Annan probably could not have imagined screen their own activities with regard to whether demographic markets or which allow the goal for its first Global Impact Fund which invests urban pockets is a win for French society. But supporting entrepreneurship and creating
ESG investing becoming such a growing priority and to which degree they comply with the SDGs. development of lower cost products and in businesses providing commercial solutions jobs is not a necessity only in the French banlieues. Social issues may have certain local
for institutional investors worldwide, along with This often leads to investing strategically in services for already existing markets. that specifically contribute measurable progress characteristics in different countries, but such cultural nuances are irrelevant. It is a
another acronym, the SDGs. They represent the their people and processes in order to be more toward one or more of the SDGs. The millennial necessity of society everywhere to create jobs. Entrepreneurs with social impact goals
• Develop more inclusive supply chains that
17 Sustainable Development Goals which the socially or environmentally minded. Also, there is have an incredible opportunity to influence the growth of their respective communities. This
are more cost effective since they depend generation, which is already actively involved
United Nations created in 2015 as a roadmap a growing number of companies matching their is the focus of Impact Partners and our investment philosophy.
on fewer suppliers and distributors and with socially responsible investing, will soon
toward a more sustainable world. own SDG profile with their financial investments, Impact Partners was launched in 2007 as one of the first social impact private equity funds
allow raw material sourcing closer to the make inroads into decision-making levels at
Various actors such as governments, private and including alternative investments such as in Europe. It now employs over 30 people and is poised to open an office in Frankfurt.
end market. corporates, institutional investors, family offices,
public companies as well as civil protesters such corporate acquisitions. Another example of a Founded in Paris, we now manage some EUR 110 million in assets under management.
notable change in the approach towards CSR is • Increase sales and support premium pricing and foundations. In this capacity, they will surely
as the Swedish teenager Greta Thunberg have Our investor base includes over 100 individual, private and public institutional investors who
the increasing number of corporate VCs focusing on products that have an environmental or be another driver in making ESG analysis a
propelled ESG/SDG investing lately. Tightened are committed to supporting entrepreneurs focused on social impact. Entrepreneurship for
on socially responsible startups, often combined social impact and are reasonably sourced. standard tool in the M&A process.
regulations have resulted in increasing interest social impact is our passion. To date, we have invested in over 100 situations. Currently we
with providing pro bono advice. This strategy This product strategy, for example, in the are supporting 28 entrepreneurs in deprived urban areas who have created programs for
and obligation of institutional investors including Going forward, will “The ESG Factor” play
not only allows investments in new innovative consumer goods industry, can also lead to disabled workers and apprenticeships. We have invested in the “circular economy” such as
asset managers, insurance companies, and an increasingly important role in corporate
products and services with sustainable growth higher customer loyalty. recycling and logistics companies. Additionally, we support inclusive education, e-learning,
pension funds to incorporate ESG criteria in their finance and particularly for Clairfield ?
opportunities. Simultaneously, these “CSR • Gain a competitive advantage in attracting, and programs for the unemployed.
investment strategies. Equally important, recent
investors” assist in strengthening the business engaging and retaining talent. More The straightforward answer is “Yes, indeed!” In
initiatives contributed to improving the level of In business today, management, institutional investors, and private equity funds require
angel scenes in countries such as Germany meaning from work often translates into 2018, assets managed by funds incorporating
transparency on ESG criteria. attention to environmental, social, and governance (ESG) issues. Impact investors go further
while attracting and retaining talented staff. I more robust financials. a socially responsible vision amounted to USD
The European Commission, for example, by maintaining that sustainability, and social impact goes hand in hand with business
am confident that initiatives like the ones briefly 30.7 trillion around the world. This is ten times performance. Impact Partners lives out our investment philosophy and commitment
published a first-time taxonomy in June 2019 • Obtain favorable financing terms since
listed above will become common CSR practice. higher than in 2006, according to the latest data to social growth every day. As an
laying out which economic activities are there is a rapidly expanding source of equity
and debt funding requiring companies to published by the Global Sustainable Investment investor, Impact Partners needs to
“green”, making benchmarking for ESG bond Fair practices, acting responsibly for the
show genuine commitment to ESG values. Alliance. ESG due diligence will become a core act and be seen as uncompromisingly
market participants easier and more effective. environment, supporting the community –
all of these things cost money. How is ESG element in corporate finance advisory, despite its professional. Impact investors are not
Furthermore, new digital technologies not only
good for a company’s bottom line? relative newness. It will comprise more than just charities but very demanding investors,
revolutionize the corporate world these days. Have you seen ESG taken into consideration
a thorough environmental due diligence.“Impact not in a philanthropic niche, but
They also significantly improve the quality of ESG A company strategy consistently incorporating in M&A processes?
M&A“ will address the target company’s control mainstream private equity that aims to
data. ESG practices will always be financially Despite the struggle of balancing short-term and
systems, gender diversity of its business make a profit. We connect with German
beneficial, if not immediately then in the long-term objectives, I have seen both corporate cultural and social issues in Germany
How has the view towards ESG changed? medium term. Numerous studies have recently and board, health and safety standards of its
and private equity sponsors evaluating and and French issues in France. But we
Employees, customers, and governments are all been undertaken showing that companies with workforce and suppliers, governance structures
subsequently investing in companies having are united by one common endeavor:
increasingly pressuring companies to play a more sustainable practices outperform companies applied ESG criteria. Drivers were not merely the to avoid corruption, and numerous other
to support social entrepreneurs in their
prominent role in addressing critical challenges that have not integrated ESG considerations avoidance of potential litigation or own investor aspects. Definitive standards around this set
communities. We value our partnership
such as climate change and economic inclusion. into operations. These studies are still rather pressure. The additional ESG lens was applied of indicators have not yet been accomplished,
with Clairfield in this pursuit, as they
Medium-sized companies as well as large fragmented and lack scale but companies have with a view of evaluating the cultural fit of the but strong efforts into the standardization of help us connect with investors and
corporates respond by actively searching for new already shown in several ways how best to target company, reducing future business risks ESG criteria are ongoing. In the Clairfield Annual seek new opportunities. With luck
Corporate Social Responsibility (CSR) projects, monetize the ESG/SDG potential. The following as well as building sustainable competitive Outlook 2021 you may already see successfully and hard work, in a few years, these
in addition to their traditional CSR activities. examples illustrate the link between ESG/SDG advantages eventually resulting in a higher completed transactions mapped against ESG successful entrepreneurs will need
Several multinationals initiate social businesses compliance and financial performance: company evaluation. Various private equity and SDG criteria reflecting what Peter Drucker M&A advice and Clairfield can help!
in developing countries either alone or together • Penetrate new markets with a focus on firms I worked with in the past not only use ESG once said, “Every single social and global issue of This is yet another vision of the circular
with strategic partners such as development environmental sustainability or societal criteria for identifying target companies. They our day is a business opportunity in disguise.” economy.
8 9
OUTLOOK 2020
serving clients
Clairfield advises multinational companies, family businesses, and
financial investors on their midmarket sales and acquisitions as well
as providing additional corporate finance services. We open doors
internationally for every client we serve.
10 11
OUTLOOK 2020
CORPORATE CLIENTS
Since our founding, corporate clients have seen the value in utilizing
Clairfield as an advisor to execute their middle-market transactions.
The corporates we have advised, both listed counterparties and bring the transaction to
and private entities, are now too numerous a smooth closing. Our experienced partners
to count. Whether divesting a non-core and bright talent work together with our
subsidiary or acquiring new capabilities or own industry experts to facilitate the best
geographies, corporate clients rely on us decisions and source the best opportunities
to access the relevant local or international on an international scale.
SELLSIDE ADVISORY BUYSIDE ADVISORY
Deal spotlight: divestment of non-core assets Deal spotlight: corporate platform acquisition
Clairfield assisted Tractebel Engineering in the disposal of its Polish JOST Werke AG, the global market leader in safety critical solutions
asset. Tractebel Engineering was ENGIE Group’s engineering arm for its for commercial vehicles, acquired Ålö AB, one of the world’s leading
investments in Poland. As a result of Tractebel’s exit from other Polish suppliers for the agricultural machinery industry, from Altor Fund III
assets (including power plants), and its refocus on renewables and for a purchase price of EUR 250 million. JOST Werke AG was founded
nuclear energy, the Polish engineering subsidiary became a non-core in 1952 and is stock-quoted since mid-2017. JOST heads the market
asset for the group. With the help of our industrial experts worldwide, in vehicle interface systems with a 60% market share. The company
Clairfield identified several local and international buyers. After some employs over 2,900 staff worldwide and operates 19 production sites
negotiations, the company was taken over by the Dutch Antea Group, in 21 countries.
who made the most interesting bid. Antea Group is an international
consultancy and engineering firm specialized in full-service solutions With this acquisition JOST transforms its existing agricultural
in the fields of environment, infrastructure, urban design, and water. business into another cornerstone of the group. JOST expects that
For Antea the transaction represented the acquisition of specialist the integration of Ålö will generate synergies in product development
engineering knowledge and an opening in eastern Europe. and purchasing as well as in the joint commercialization of products
for the agricultural industry. This transaction is a landmark example
of efficient crossborder teamwork providing our client with resilient
access to the seller, a creative local sounding board and management
of complex due diligence workstreams under time pressure.
Recent sellside transactions for corporate clients Recent buyside transactions for corporate clients
ITALY/FRANCE GERMANY FRANCE FRANCE GERMANY GERMANY DENMARK/POLAND US/SPAIN
sold sold its online real-estate
sold
classifieds business acquired acquired a majority
sold its Puglia shareholding in acquired
Business Unit to acquired
to
to to the Group
Private investors
FINLAND/SWEDEN FINLAND NORWAY FRANCE/ITALY GERMANY/FRANCE GERMANY GERMANY/US/FRANCE ITALY
Bodet Group
sold
sold sold
sold its call center acquired acquired the German acquired
BPO to operation of HC Human Connections
LOMPAKKO acquired
to to
to
12 13
OUTLOOK 2020
PRIVATE EQUITY FAMILY BUSINESSES
Clairfield has long experience in working with private equity as both Family businesses and the core values that they have been built on
client and counterparty. are a special focus for Clairfield.
Private equity today acts as a valuable for management actively seeking LBO Family-owned businesses are the backbone in owned companies can count on Clairfield to
partner to entrepreneurs, family businesses, situations, and for minority positions, as most of the economies where we are present deliver uncompromised advice surrounding
and midmarket companies, helping them well as for many other situations. Clairfield and as such are a key client group. Clairfield all elements of a transaction. We help
on their path to growth. The investment by has a long history of bringing middlemarket understands the unique challenges faced facilitate the most appropriate deal process
private equity funds into growth industries, companies and entrepreneurs to the table by such companies, whether succession in each situation and offer access that gets
industries in need of consolidation, and with private equity. or generational issues, to growing globally interest from the best strategic or financial
buy-and-build platforms accounts for a large in order to compete. We provide family counterparties. We understand the small
proportion of global M&A activity, especially Clairfield provides end-to-end M&A advisory advisory, an early sounding board, family closing details that are important to family-
in the middle market. service to private equity. We engage and governance, valuation, strategic advisory business owners and are on your side to
assist with private equity by offering inroads options, and potential transactions. Family- achieve them.
The flexibility and know-how of private- and expertise in local markets and, more
equity players make them preferred importantly, by originating investment
partners and more and more clients prefer opportunities through ad-hoc or structured
financial investors to strategic acquirors. We processes. We also regularly help PE firms Deal spotlight: private equity solution found
encourage our clients to consider private on their exits by deploying our international
equity as the partner of choice for corporate presence to ensure that the most relevant
for Danish family business
divestments, for exit/growth partnerships industrial and international buyers are pulled
and problem solvers for family businesses, into the sale process. Wendelbo, a furniture-design brand, sold a majority stake to Maj Invest
Equity, the leading Danish private-equity fund. Wendelbo is a family-
owned company, which, since 1955 and through three generations,
has been owned and led by the Wendelbo family. Its products are sold
Deal spotlight: creating and delivering a globally via 200 distributors with North America as its largest market.
unique roll-up opportunity In recent years, the company achieved significant double-digit growth
rates across products, distribution channels and geographic markets,
Adelis Equity, a private-equity firm focused on the Nordic middle and growth reflects both increased sales of existing designs and
market, acquired all the affiliated offices of Säkra AB, thus success with the launch of new designs.
forming a leading brokerage firm with a focus on property & The deal team worked with the family to find an investor that would
casualty insurance, life insurance, pensions, and savings. With take the company to the next level while permitting its continued
acquired this transaction Säkra strengthens its market position, expands involvement and respecting its values as a proud Nordic design company. The investment by Maj
its customer offering, and drives market consolidation. Adelis will accelerates further international expansion and provides an experienced partner in the sector. The
enable Säkra to become a strong platform for insurance brokerage family will continue in the management of the company and as minority shareholders after the
at a time when the market is fundamentally changing due to new transaction, providing the perfect solution for this growing, international, family business.
regulatory frameworks and digitalization. Clairfield has advised
Adelis Equity on numerous occasions, identifying markets ripe for
consolidation and bringing access to the fragmented players.
Recent transactions on behalf of private equity Recent transactions on behalf of family businesses
FRANCE/QATAR NETHERLANDS ITALY/GERMANY UNITED KINGDOM NORWAY/DENMARK UNITED KINGDOM ITALY/GERMANY FINLAND/US/SWEDEN
and Unsworth Family
backed by Investments
backed by
acquired a
35% interest in
invested in was sold to acquired was sold to was sold to
acquired acquired
ISRAEL/UNITED STATES POLAND/HUNGARY UNITED STATES/FINLAND FRANCE DENMARK UNITED KINGDOM AUSTRALIA UNITED KINGDOM
PEFVI
sold together with
acquired 3 Finnish sold
sold
software companies
sold a majority invested in
& the management team stake to was sold to
to acquired to
to
14 15
OUTLOOK 2020
OPENING DOORS IN ASIA CAPITAL SOLUTIONS
Clairfield offers unique access to decision makers at Asian corporates, The Capital Solutions team focuses on acquisition financing, project
investors, and political entities, as well as local Asian experts and financing, fundraising, leveraged buyouts, real-estate advisory, public-
advisors. private partnerships, and company advisory in the context of public and
private offerings.
Western midmarket companies are eager market developments and government
to explore strategic alternatives with Asian policies. Our extensive network in China
parties, yet the lack of up-to-date and permits access to both state-owned
effective knowledge on how to go about Clairfield’s Capital Solutions team, led by Hans Buysse and Kalle
enterprises and private businesses and Helander, has years of collective experience advising boards, CEOs,
accessing buyers is widespread, with most investor groups. We also have top contacts CFOs, and shareholders in strategic decisions regarding capital
Western advisory firms unable to conduct to the most effective and knowledgeable structure, positioning in the capital markets, and financing as well
approaches and advise on ramifications.
advisors in Japan, where we closed four as landmark private-public-partnerships. The group has access to
China is of particular interest in recent years.
crossborder deals in 2019 alone. Hans Buysse an extensive network of banks and alternative financiers.
Clairfield’s dedicated China Desk provides
the solution by liaising with the right people Clairfield boasts a significant track record Private finance initiatives include work in sectors such as energy,
in China for each situation. utilities, networks, healthcare, transport and infrastructure, and
of deals successfully closed with Asian
project finance for real estate. Specific services include:
The China Desk offers in-depth counterparties with such well-known names
understanding of both Western and Asian as Huawei, Mitsubishi, and Ajinomoto,
and industrial giants CRRC, Weichai, and • PPP: Focus on infrastructure and transport, work for the bidding
business practices and culture, transaction
Kalle Helander consortium in tenders initiated by a public authority.
and language support as well as advice on SH-ABC.
• Credit advisory and acquisition financing advisory.
• LBO: Complete structuring with focus on both debt and equity.
• Special financing: troubleshooting using mezzanine debt and
bank debt providers.
• Growth capital and venture capital, particularly for the
technology advisory.
Recent transactions with Asian involvement Capital Solutions transactions
GERMANY/CHINA ITALY/CHINA AUSTRALIA/CHINA ITALY/CHINA BELGIUM/FRANCE BELGIUM BELGIUM GERMANY/POLAND
and the other
signed a contract for shareholders sold sold
the sale of refinanced credit
was sold to facilities through
Private financing reached financial close was refinanced with
to to to on the Brabo II project senior debt
DZG Investments
Pty Ltd with a EUR 100 bond
issue
China Glass Holdings Limited
FRANCE/CHINA/NETHERLANDS AUSTRALIA/SINGAPORE UNITED KINGDOM/JAPAN JAPAN/BELGIUM/SPAIN BELGIUM FINLAND NETHERLANDS SPAIN
Member of the
STAR consortium
acquired through its
subsidiary Advisory to the
Belgian state
merged with was sold to was sold to refinancing and debt acquired
a majority stake in attracted growth
Agro2Agri, the consortium capital raising for the financing from
on the disposal of acquisition of
comprising BNP-Paribas, Proximus,
Bpost, Belfius, Ethias,
National Lottery,
Brussels Airport, and
other assets
16 17OUTLOOK 2020
sector expertise
Business services
Consumer & retail
Energy, cleantech & resources
Healthcare
Industrials
Technology, media & telecom
18 19OUTLOOK 2020
Business services deal spotlight
Clairfield advised Spanish BPO company on its sale to PE-
was sold to
backed Italian leader in international services transaction
Business services GSS, a EUR 118 million revenue BPO and call center company operating in Europe and Latin America, was
sold to Covisian, one of the leading Italian companies in outsourcing business processes. GSS will now be
integrated with the second largest BPO firm in Italy.
GSS is a multi-country, multi-channel provider relations, brand strategy, and business processes throughout Europe while maintaining its interests
of value-added BPO services such as telesales, through a patented artificial intelligence system. in high-growth countries.
contact center, field marketing, and collection, In the rapidly consolidating BPO, contact and call Clairfield International had worked with GSS on
with a blue-chip client portfolio of banks, center market, GSS was looking to partner with an previous occasions and was engaged as a trusted
telecoms, insurance and energy companies, industrial company who could assist the company advisor again to lead the sale process. Clairfield
In the last 15 years, the business services sector has among others. Founded in 1997, the company in its continued growth in LatAm and Spain. provided GSS with a full range of financial
undergone massive technological transformation. has a significant international presence with Covisian, backed by the Italian private equity fund
advisory services including strategic advice,
T
65% of revenue generated in Spain and 35% senior M&A tactical advice, valuation, marketing
Aksia, offers a good geographical fit and provides
he business services sector is constantly adapting to the changing generated in Latin American through its Peruvian materials preparation, transaction structuring,
GSS with access to its SPARTA software to
needs of customers and evolving market landscapes. Because of subsidiary and employs over 7700 people in and due diligence coordination of both GSS
the constant changes, the services sector has many opportunities enhance productivity. Top management of GSS
and Covisian. Leveraging on the expertise and
Spain and Latin America. is reinvesting into Covisian with the acquisition of
to improve processes and efficiencies in companies across a wide range of contacts of Clairfield’s business services sector
industries. One key change over the last few years has been the rapid pace Covisian is controlled by the Aksia Capital IV a joint 5% stake, so the transaction also takes on group, the team contacted a wide range of
of technological advancements. We are looking at Services 4.0, a revolution Fund. Originally established in 2016 through a a merger consideration. The transaction results international financial and strategic investors.
that uses technology and automation to reduce costs and personnel while merger of a data analytics firm and an established in a combined staff of over 14,000 employees Clairfield’s Spanish and Italian offices worked
boosting customer satisfaction, with huge ramifications for industry and BPO enterprise, Covisian has a workforce of over in 12 countries and revenues in excess of EUR together seamlessly to manage the negotiations
society as a whole. Market share and value chain positions are fought for 5000 people that offers solutions for customer 300 million, and allows GSS to offer its services until the successful closing.
hard and M&A can be what companies need to come up to speed quickly.
The nature of the competitive environment illustrates that value creation
through M&A can be very advantageous. Acquisitions in order to gain
market share, maneuver in a rapidly changing competitive landscape, or
Selected recent transactions
gain new technologies are some of the most cited reasons for M&A heading BRAZIL/GERMANY UNITED KINGDOM ITALY DENMARK FRANCE GERMANY/POLAND
into 2020. Management &
When the economic climate faces a more uncertain outlook, investors tend
together with
to feel more comfortable in a sector such as services, in which many sub-
segments have a lower exposure to shifts in the economic climate. In addition, sold a majority
sold its business unit to stake to & the management team
these companies tend to help clients in the day-to-day business, while saving was sold to
acquired
money. For the clients, these services are often must-have services, rather acquired was refinanced
with
than nice to have, and tend not to impose any major capex investments senior debt
but rather use SaaS-models (Services as a Service), with monthly fees or
fees per transaction. In regions such as Poland and the CEE region too,
investment activities in the BPO segment dominate as foreign and local
companies take advantage of lower labor costs to establish and expand their AUSTRALIA/US ITALY/FRANCE SPAIN/UK SPAIN/UNITED STATES FRANCE/UNITED STATES FRANCE/BRAZIL
banking, financial services, accounting, insurance and IT services. Foreign
investors employing more than 4,000 BPO workers include Capgemini, IBM,
Nokia, Credit Suisse, State Street Citigroup, and Sii. Rapid expansion of
this segment is expected to continue allowing smaller local businesses, backed the
a company of
including startups, to grow as a result of existing BPO services. MBO of was sold to was sold to acquired
was sold to
The services sector is an important and active one for Clairfield. We expect acquired
the high activity level to continue for this sector.
SECTOR HEADS
DENMARK/FRANCE SWEDEN NETHERLANDS/UK UNITED KINGDOM FRANCE MEXICO
Management &
was sold to acquired was sold to acquired acquired was sold to
Patrik Egeland Gustaf Rova
pegeland@clairfield.com grova@clairfield.com
20 21You can also read
