Amazon has announced it will acquire upmarket grocer, Whole Foods Market Inc, for $13.7 billion in a deal that includes the company’s debt. Expected to close late 2017, the deal will not only be the largest in the online retailer’s history, but also a major step in expanding into bricks-and-mortar retail.

 

Founded in 1978 in Texas, Whole Foods Market has been a pioneer of natural and organic foods, and, today, boasts more than 460 stores throughout the US, Canada, and the UK that employ approximately 87,000 staff.

 

In anticipation of the announcement, the company’s closing share price showed a 27 per cent premium. Excluding the debt, the acquisition is valued at $13.39 billion, with $318.9 million diluted shares outstanding from April.

 

The megadeal will no doubt give Whole Foods Market a major advantage over its competitors due to Amazon’s established online presence and strong buying power.

 

Whole Foods Market Boss, John Mackey, said: “This partnership presents an opportunity to maximise value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers.”

 

Amazon Founder and Chief Executive, Jeff Bezos, said: “Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthily. Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

 

The grocer is expected to continue to trade under the Whole Foods Market banner, with John Mackey remaining its Chief Executive.

 

Stay tuned to our blog for industry M&A analysis and get in touch with our experienced team if you have any questions about the M&A process and how Benchmark International can help you.

 

Amazon 2.jpg

 

Last week it was announced that German chemicals giant Linde have signed a formal agreement for a €70bn deal with US industrial gases company Praxair, despite worker representatives opposing the merger.

While industry analysts believe too much time has been invested for the deal not to be finalised, anxiety over job losses caused Linde to miss their deadline at a recent shareholder meeting.

Aldo Belloni, who came out of retirement to become Linde’s chief executive last December, stated that the group would dispose of certain assets to pre-empt regulatory concerns. Analysts point to the US, Brazil, Spain and Italy, where jobs could be at risk if their presence could be deemed too large.

The “merger of equals” was submitted on Wednesday to the Stuttgart exchange and although the regulators, board members, and shareholders need to approve, this suggests that Linde and Praxair are closer to coming to terms. The submission represents a major step forward for the groups, which have had difficulties before. Two of Linde’s top executives left the business when talks broke down, only for preliminary terms to be announced shortly after in December.

Linde chairman Wolfgang Reitzle, considered to be the architect behind the deal, has gone on record to say that he would be willing to use his double casting vote to approve the merger if the shareholders and the worker representative’s fail to approve.

Analysts at Bernstein estimated that, if the deal was finalised, the group could account for 40 per cent of the global industrial gases market, displacing Air Liquide as the market leader.

Air Liquide’s acquisition of Airgas last year took over nine months to be approved in the US, so insiders feel this could still be up in the air for a while longer.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Linde 2

American computing giant Microsoft continues to expand its acquisitions of Israeli-based software companies, with a reported $100 million deal for cybersecurity start-up Hexadite.

Founded in Tel Aviv and now based out of Boston MA, Hexadite deals in cyberattacks and mitigating damage to systems through machine learning, which helps its clients increase productivity and reduce costs. The software can easily be added to existing firewall solutions, making it simple for Microsoft to integrate with existing lines.

According to the website, Hexadite’s software “investigates every alert in seconds” by using “top cyber analysts” and artificial intelligence. The software algorithms are used to detect and investigate every threat and act on the ones which provide a danger to a client’s network. The company’s clients include Telit, Nuance Communications and other financial and industrial firms.

Hexadite has raised $10.5 million to date and employs 35 people. Its founders, Eran Barak, Barak Klinghofer and Idan Levin, all served in elite intelligence units of the Israeli army and worked for defense electronics firm Elbit Systems.

Microsoft’s other cybersecurity acquisitions from Israeli start-ups, include Adallom, Secure Islands, and Aorata. The latest deal would solidify Israel as one of the main places for companies seeking talent in the cybersecurity market.

The deal comes shortly after Microsoft announced it would continue to invest $1 billion in 2017 into the research and development of cybersecurity, excluding any acquisitions that they may make.

As businesses and the world move towards digitised systems, they become more vulnerable to these threats, as recently seen when a planned attack disrupted over 10,000 organisations across 150 countries, including the UK’s NHS.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Mic 2

Following news last week that Apple had completed a deal to acquire sleep-tracking device company Beddit, the tech behemoth has completed yet another acquisition in the form of Lattice.io.

In a higher profile deal than Beddit, Apple revealed it had acquired the artificial intelligence and machine learning start-up, which takes dark data and turns it into useable information. While no official information was released as to the value of the deal, it’s speculated to have been between $175 million and $200 million.

Lattice.io spins out of a Stanford University research project entitled DeepDive, and describes itself as able to turn “dark data into structured data with human-caliber quality at machine-caliber scale.”

What is dark data? IBM estimates that 90 per cent of the data in existence today was produced in the last two years. However, between 70 and 80 per cent of that data is dark. In other words, unstructured and wholly unusable when it comes to processing and analytics. Lattice.io uses machine learning to take this dark data and put it into some kind of order so that it becomes usable.

Founded in 2015, the company has been making waves, raising at least $20 million in funding from GV, Madrona and InQTel. Despite this, it has largely remained under the radar until the Apple deal.

TechCrunch reported that the deal closed a couple of weeks ago and that about 20 engineers have joined the larger company. It’s been said in the media that Lattice’s experienced engineers are of prime importance to Apple in this deal, especially when considering it has been designing AI-type products for a long time now.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

applee2

Following our report last month on the $130bn mega-merger between US chemical giants Dow Chemical and DuPont, a new deal has announced the creation of a chemicals giant with a market value of approx $14 billion.  This latest high-profile transaction across the diversified chemicals sector sees companies are striking ever more aggressive deals to find new ways to slash costs and gain greater scale of their segments, typifying the current market trend for companies to cut costs and boost revenue.

In a statement last week, Huntsman Corp and Switzerland’s Clariant AG, a spin off from Sandoz formed in 1995, unveiled this multibillion dollar all-stock cross-border merger that will see Clariant investors controlling about 52 per cent of the combined group, while Huntsman shareholders will own the remainder. According to the statement, the new HuntsmanClariant will have a combined enterprise value of approximately $20 billion.

Clariant has been the subject of endless deal speculation in recent years, with larger rivals such as Germany’s Evonik having considered takeover approaches in the M&A activity-rich sector.

We also share an update on the $43 billion sale of Syngenta to ChemChina, which is anticipated to complete in summer 2017 as financing is in place to close the deal.  First phase growth is anticipated in China, where there is strong opportunity for Syngenta to help strengthen Chinese agriculture using ChemChina’s domestic knowledge and funding to bring technologies to the market.

According to Deloitte, global chemical M&A activity is set to grow throughout 2017, but factors such as protectionism and increasing interest rates will come into play, which may hamper the record activity levels seen in previous years.  Considering global activity, the US market is anticipated to stay buoyant and, in South America, the Brazilian market is recovering steadily.  In Europe, the UK remains an attractive market for strategic and financial buyers.  In Germany and particularly in Switzerland, chemical companies are continuing to focus on acquisition to extend their value chains and fill technology gaps.  In Asia, it is expected that both inbound and outbound mergers in China will increase in 2017 and the strong economic growth in India is set to fuel vibrant chemical M&A activity.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Chem 2

Italy’s largest coffee group by sales, Lavazza now have the capacity to spend up to €2bn on acquisitions to further its global ambitions within a strong industry dominated by Nestlé and JAB of Switzerland.

Lavazza Chief executive, Antonio Baravalle said: “If we want to be independent in this big consolidation process, there is only one possibility – to grow. Either you sell or you grow, there is no other alternative.”

Mr Baravalle has said that Lavazza is looking into potential acquisitions, while also making investment to grow. Since it began in 1895, the Turin-based company have established themselves within the industry, becoming the world’s third largest coffee company by retail sales, after a number of acquisitions.

However, when compared to Nestlé and JAB who have more than a third of the global coffee market between them, Lavazza is a long way off with just 3% of the global market.

“Within another year, we will be able to look at other opportunities,” Mr Baravalle said, adding the group’s target was to achieve revenues of €2.2bn in 2020, with the help of acquisitions.

Lavazza has net cash of €700m and would be able to raise €1.5bn, arming them with €2bn of potential M&A firepower. Mr Baravalle added the company have enough money to spend on its path before considering an IPO.

Over the past 4 years, Industry giant JAB spent $30bn on acquiring coffee brands, including Jacobs Douwe Egberts and Keurig Green Mountain, amongst others.

Acknowledging the difference in scale, Mr Baravalle said: “There is space for an independent third group. We are lucky to have one of the few potential global coffee brands; we are in the premium part of the market and in the espresso-based segment, which is booming.”

Lavazza’s 2016 takeover of France’s largest coffee retail brand, Carte Noir, boosted group revenues 29% to €1.9bn compared to 2015. New products, including Prontissimo!, the company’s first premium instant coffee, aided their organic growth by 4%, excluding acquisitions. Operating profits of €61.7m displayed a rise of 34%.

When former executive of Fiat and Diageo, Mr Baravalle took charge of the Turin-based company 6 years ago, 30% of its sales came from outside Italy, a figure which last year rose to 60%.

Lavazza’s share of its home market rose marginally to 41% but it will face competition from Starbucks, which is opening its first store in Milan.

In response to Starbucks’s global expansion, Mr Baravalle said: “I am very happy with Starbucks opening everywhere because they are moving people from instant coffee to espresso.”

North America, Germany and northern Europe are deemed as attractive areas for expansion, with fair trade and organic coffee being highlighted as fast growing segments for potential M&A. However, he concluded by saying: “There is only one rule – ownership of the company will remain with the Lavazza family”.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Lavazza 2

 

Last week it was revealed that Apple had completed a low-key deal to acquire Beddit, a Finnish company that makes sleep-tracking devices compatible with apps for both iOS and the Apple Watch.

News of the acquisition was broken by CNBC which reported that the privacy section of the Beddit website had been updated to note the deal and confirm that all consumer data is now subject to Apple’s own privacy policy.

Beddit has made a name for itself in recent years with its $150 sleep monitor that is placed under your bedsheets to track sleep during the night. All of the data from the sleep is available to view via the Beddit Sleep Monitor iOS app.

While Beddit’s website and customer service offering as yet remains unchanged, Apple rarely acquires companies that continue to operate independently in the long term. It has been speculated that Beddit provides Apple with the opportunity to create its own sleep tracking software for the Apple Watch. Currently, the Apple Watch only provides sleep tracking through the use of third-party apps, and even then the device requires charging, which users usually do overnight.

Since completion of the deal, the Beddit page promoting its Apple Watch capabilities via the watchOS companion app has been taken down, suggesting some form of tech integration for the Apple Watch in the near future.

This is Apple’s latest deal since it acquired Workflow, an iOS tool that automates complex processes by allowing users to combine the functionalities of different apps.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Apple 2

New York design house of modern luxury accessories and lifestyle brands, Coach Inc has acquired its rival Kate Spade & Company for $2.4 billion, a figure “not justified strictly by the numbers” according to the New York Times.

The deal figure represents a 27.5 per cent premium on the share price of Kate Space before talk of a deal emerged in December. Coach’s chief executive Victor Luis has promised to only cut $50 million in costs and will apparently do so through making savings in the supply chain as opposed to closing stores. The New York Times states that taxed and capitalised, these are worth in the region of $320 million, which leads them to the conclusion Coach is overpaying by around $200 million.

The deal brings together two leading brands in the luxury goods sector and grants Coach access to millennial shoppers, which make up 60 per cent of Kate Spade’s customers.

Coach is no stranger to acquisitions having bought high-end shoe maker Stuart Weitzman in 2015 in a $574 million deal, gaining a further foothold in the luxury brand market. The Kate Space acquisition, Coach’s biggest yet, comes at a time when shoppers of luxury goods are increasingly challenging the traditional shopping methods in favour of online stores.

Speaking about the deal, Coach’s Luis said: “The acquisition of Kate Spade is an important step in Coach’s evolution as a customer-focused, multi-brand organisation. The combination enhances our position in the attractive global premium handbag and accessories, footwear and outerwear categories.”

Founded in 1993 by former journalist Kate Brosnahan Spade, Kate Spade has expanded quickly with its products stocked in high-end retailers such as Fifth Avenue and Saks. Its bags are particularly popular with millennials due to their colourful and quirky designs, with prices ranging from around $150 to $450.

The deal, which is expected to close in the third quarter of 2017, has been declared a good move for both businesses by analysts.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Coach 2

Apple has hit the headlines this week with the media speculating whether or not they are set for a mammoth acquisition due to its significant and ever-growing stash of cash.

It’s estimated that the tech giant holds somewhere in the region of a quarter-trillion dollars that it could use to snap up another business or two. Amongst the potential acquisition targets is Netflix and Tesla Motors, with both brands making a lot of sense for Apple given its interest in providing a TV service and the company’s more recent work on self-driving cars.

One of the bolder acquisition predictions comes in the form of Disney. The entertainment behemoth has not displayed any inclination that it’s looking to sell, but as it’s a publicly-held company, it must consider all takeover offers. Acquiring Disney would not come cheap for Apple likely costing in the region of $250 billion dollars, or $157 a share. It’s this high price tag that has caused insiders to speculate, given that Apple is one of the only companies in the world that could actually pay that sum of money.

If Apple did acquire Disney, we would see the world’s first one trillion dollar company. Additionally, it would combine some of the world’s most successful and instantly recognisable brands in the technology and entertainment arena, including iPhone, Mac, Disneyland, ESPN and Lucasfilm.

Talk of a potential mega acquisition has gathered pace in the wake of the Trump administration, where promises have been made to lower US taxes on overseas corporate cash, that’s brought back into the country. Apple’s CEO Tim Cook has said that the company will look at bringing back the cash stocks it keeps abroad, which would undoubtedly make financing a blockbuster deal a lot easier.

One thing is for certain, all eyes will be on Apple over the coming months. Watch this space for further updates on the story as it progresses.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

apple 2

This week it was announced SiriusXM would acquire San Francisco-based connected car company Automatic Labs Inc. in a deal worth $100 million, according to TechCrunch.

The acquisition brings together two giants in the connected car industry with Automatic’s data driven platform providing drivers with vehicle diagnostic alerts, emergency crash assistance, fuel monitoring, access to parting information and live vehicle location tracking, joining SiriusXM which offers leading, commercial-free audio entertainment and data services in vehicles as well as safety, security and convenience services.

The acquisition follows a solid 12 months for New York-based SiriusXM, which added a net of 257,000 new subscribers last quarter, taking its total to around 31.6 million. Its net income rose to $207.1 million in the three months ending 31 March, which is up from $172.4 million in the same quarter last year.

The acquisition of Automatic will strengthen SiriusXM’s position in the burgeoning connected vehicle market. Research from McKinsey supports this, with its projection that new connected car services could create up to $1.5 trillion in additional revenue potential in the automotive industry by 2030.

In a statement regarding the deal, Jim Meyer, CEO of SiriusXM said: “Automatic’s innovative products have brought safety, intelligence data and analytics to the forefront of vehicle connectivity. We are excited to welcome the talented employees at Automatic to SiriusXM as we expand the possibilities of connected vehicle offerings and services for manufacturers, drivers and enterprises.”

Gary Clayton, CEO of Automatic echoed Meyer’s statement: “Automatic is thrilled to join forces with SiriusXM at such an exciting time for the connected car industry. Automakers, enterprises and consumers are looking for the best products with world-class capabilities, and our teams will continue to bring innovation to the connected vehicle landscape under SiriusXM.”

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

SIRIUS 2

According to a recent report, UK companies are braced for a surge in deal-making this year, as executives prepare their businesses for life away from the European Union.

Accountancy juggernaut Ernst & Young found that 51% of UK firms expect to actively pursue mergers and acquisitions within the next 12 months, a rise of three percent from October 2016, but slightly lagging behind the global figure of 56%.

Capture-large_trans_NvBQzQNjv4BqqVzuuqpFlyLIwiB6NTmJwfSVWeZ_vEN7c6bHu2jJnT8

Despite the backdrop of a looming general election and Brexit negotiations, the UK has reclaimed its spot as the third most attractive destination for deal-making, having dropped out of the top five for the first time in the report’s seven-year history last October in the wake of the EU referendum.

Such a rejuvenated appetite for UK deals comes after Theresa May triggered Article 50 in March.

EY found 23% of global companies said that clarity over the Brexit negotiations timetable since then has increased their chances of investing in the UK. Author of the report, Steve Ivermee, said: “That the UK remains a top destination for domestic and global companies to do deals is a measure of its continuing attractiveness.”

Capture

However, he warned: “The UK will need to work hard to maintain its position as the Brexit negotiations unfold.” As British companies move to maximise growth opportunities ahead of the country’s separation from the EU, there has been an 11% fall in the number of businesses expecting growth to come from organic sources.

Focus has instead shifted towards inorganic growth, such as joint ventures, in the wake of last year’s Brexit vote.

Almost a quarter of respondents expect growth to come from joint ventures, compared with just 13% six months ago, EY said, after surveying more than 2,300 executives in 43 countries last month.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

 

After several weeks of speculation, it has been announced that global lab testing specialist Exova has accepted an all-cash takeover from its industry rival Element Materials Technology Group.

The deal, worth a reported £620 million, will see Element pay £2.40 per share to all investors in Exova. This represents a 10.7 per cent premium to the stock’s closing price on March 24 before Exova entered into discussions with potential buyers.

It was also reported in the Financial Times that Exova has climbed approximately 39 per cent over the past year to its £2.20 pricing after it emerged that majority shareholder, Clayton Dubilier & Rice, would be putting it up for sale. March saw Exova, whose laboratories test the safety and performance of products used in industries ranging from aerospace to pharmaceuticals, receive proposals for a possible cash offer from Element.

In a statement issued last week, Element stated the transaction is expected to increase its reach across North America, Europe and Asia and that the combined business will boast more than 6,200 employees, with over 195 laboratories and operating in more than 30 countries.

CEO of Element, Charles Noall said: “The combined group will benefit from having the best technical talent, very significant testing capacity and a strong network of facilities to support our customers’ global testing requirements.”

Allister Langlands, chairman of Exova said: “This represents a good outcome for shareholders and the combinations of Exova and Element creates a global leader in the testing market. Since the IPO, the Exova management team have made significant progress driving organic growth across many of our businesses and developing an attractive acquisition strategy.”

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Exova 1

In the biggest deal of the company’s 120-year history, medical device giant Becton, Dickinson & Company has announced its acquisition of C.R. Bard for $24 billion.

The cash and stock deal will see Bard shareholders receive $222.93 in cash and 0.5077 shares of Becton Dickinson stock per Bard share, or $317 per Bard share based on Becton Dickinson’s closing price of $185.29.

The acquisition means Becton Dickinson’s portfolio, currently comprising syringes and infusion products, will be boosted with devices in the fast-growing fields of vascular medicine, urology, oncology and surgery. In a similar move, Becton Dickinson acquired CareFusion Corp two years ago for $12 billion so that the two companies could combine portfolios and offer integrated medication management solutions and smart devices.

The deal will also see the company expand its board of directors, with Bard CEO Tim Ring and another Bard director expected to join the board. Speaking of the deal, Ring said: “We are confident that this combination will deliver meaningful benefits for customers and patients, as we see opportunities to leverage Becton Dickinson’s leadership, especially in medication management and infection prevention.”

This deal follows the current trend in the medical technology sector as organisations turn to acquisitions to enhance their presence in the market and boost profit margins. This was something Vincent Forlenza, CEO of Becton Dickinson, commented on in a statement following the announcement: “We expect that this deal will cause others in the space to take a step back and ask themselves if there is an opportunity to do another large transaction and should we be acting upon it.”

The Becton Dickinson and Bard deal is expected to close in the third quarter of 2017, subject to regulatory and shareholder approvals.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Becton 2

It appears many buyers are once again attempting to bag bargain acquisitions by exploiting business owners blinded by multi-million pound cheques and disadvantaged by a lack of advice from a seasoned M&A professional.

Such behaviour is becoming increasingly common as corporate and financial buyers seek to avoid the increasingly competitive atmosphere surrounding deals, which typically drives values higher.

One of our most recent deals, the sale of Hi-Tech Products Limited to Siegwerk, is a perfect example of just this, and the specialist advice and expertise brought to the table by Benchmark International resulted in serious competitive tension and a final offer that was 30% greater than the poorest offer – proof positive of the benefits of engaging a professional M&A adviser.

Set out below are the three primary reasons why M&A specialists enhance the overall value received upon exit for business owners.

Experience

Engaging an experienced M&A specialist is imperative to a successful completion, as experience feeds all aspects of the company sale process. Additionally, the benefits of experience are evident come the negotiation stages. Bids can often prove deceptive, and a bid that may initially seem like a great deal can prove otherwise if structured in a manner that suits only the buyer. An M&A specialist will possess strong negotiation skills as well as managing bids and acquisitive parties correctly, resulting in significantly improved deal values and initial consideration.

Benchmark International has brought together experienced M&A professionals from around the world and formed a team that successfully, and consistently, markets our clients’ companies to appropriate parties worldwide. Combining a wealth of knowledge and experience, along with an on-the-ground presence across a global network, we continually provide clients with a selection of differing and highly motivated potential acquirers. 

Maintaining Focus

An often unappreciated aspect of the company sale process is the time and effort required to complete an exit. Business owners managing the sale will also find themselves facing the complex task of maintaining consistent operational performance, something which can ultimately lead to a reduction in the company value.

Instructing a specialist to lead the sale allows for both focus and consistent performance levels to be maintained, as the M&A adviser handles the majority of time-consuming processes.

Marketing and Research Capabilities

Maximum value received upon exit cannot be guaranteed, especially if the opportunity has not been placed in front of as many of the most suitable acquirers as possible. In order to effectively market an acquisition opportunity, the specialist instructed must possess the capabilities to communicate with every potential acquirer on a global scale, due to the increasingly globalised M&A environment we find ourselves in.

In order to ensure all potential acquirers have been identified, the M&A adviser must have the wherewithal to do so, particularly a thorough understanding of research techniques and M&A knowledge in addition to specialised M&A research software.

Combining global research and marketing capabilities allows for an increased level of competition surrounding deals, which is an essential aspect in ensuring maximum value.

Understanding who would be motivated and capable of making an acquisition is not enough. It is vital that the M&A specialist possesses the capabilities to market the company in a targeted manner to highly motivated acquirers across the globe. Benchmark International has a unique M&A software platform, Deal Desk Pro, which allows us to identify and engage closely with acquisitive parties on a global scale.

If you wish to obtain the maximum value and the most advantageous deal structure for your exit, it is essential that you remain focused on your business and engage a professional who will not only give you access to the most suitable buyers, but who will also provide the technical knowledge necessary to leverage the interest in your favour.

Beware 2

 

This week, PetSmart announced its intention to acquire fast-growing pet food and product site Chewy.com in a deal alleged to fetch $3.35 billion, surpassing Walmart’s $3.3 billion purchase of Jet.com to become the biggest e-commerce deal ever.

What makes the deal even more interesting is that traditional bricks-and-mortar retailer PetSmart was itself valued at just $8.7 billion in 2015 when it was taken over by private investors. Despite this, it’s clear to see just how the five-year-old Chewy caught PetSmart’s eye given it has become one of the fastest growing e-commerce websites in the world, registering almost $900 million in revenue last year alone.

Founded by Ryan Cohen and Michael Day, Chewy has managed to build a solid following and has even developed cult status due to its dedication to maintaining exceptional levels of customer service, large product selection, low prices and speedy delivery. There’s also the added fact that the company has raised at least $236 million in venture capital from investors including BlackRock, Volition Capital and T. Rowe Price.

Despite the sheer scale of PetSmart with its $7 billion in revenues and more than 1,500 stores in the USA, it’s been reported that sales for the 30-year-old company have remained flat. It’s widely acknowledged that even though PetSmart still attracts customers into stores thanks to its grooming and on-site vet services, competition from online pet product retailers, such as Amazon and, of course, Chewy, have placed them under significant pressure to evolve.

With consumer spending continuing to shift to online, it’s likely more traditional retailers will chase the tail of PetSmart by identifying opportunities to enter this lucrative market and take back some of the market share they may have lost over the years.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Petsmart 2

Following months of speculation, it was confirmed last week that US cereal giant Post Holdings is to acquire British cereal company Weetabix in a deal worth £1.4 billion.

Rumours of acquisition started after Weetabix owners Bright Food and Baring Private Equity Asia put the business up for sale earlier this year. It follows what has been a hugely successful year for Weetabix in which its grew UK market share for cereals and drinks from 15.3 per cent to 16.4 per cent.

A firm favourite at the British breakfast table since 1932, the Weetabix portfolio includes Alpen, Ready Brek, Wheetos and, of course, the Weetabix brand, all of which are exported to 80 countries around the world.

China’s Bright Food’s bought a 60 per cent stake in Weetabix in 2012 and although sales in China doubled in 2016, it appeared Weetabix struggled to build significant market share due to consumer preference for hot, rice-based breakfast rather than cold cereal.

Headquartered in Missouri, Post Holdings is the third largest cereal firm in the US with a portfolio of well-known brands including Great Grains, Golden Crisp and Cocoa Pebbles. The company’s president and chief executive Rob Vitale commented on the Weetabix acquisition: “We have long admired Weetabix as a leader in cereal and believe it will be a fantastic strategic fit within Post. Combining two category leaders continues our strategy of strengthening our portfolio in stable categories and diversifying into new markets, bringing much-loved brands to significantly more customers globally.”

Giles Turrell, chief executive at the Weetabix Food Company said: “Today’s deal is great news for the team at Weetabix and all those who love our brands. The past five years have seen us increase our branded sales at home and overseas. Post is a leader within its markets and shares our commitment to providing the great tasting nutritious products for the whole family. I’m confident they will help us open doors for continued expansion.”

The deal is expected to close in the third quarter of 2017.

Stay tuned to our blog for industry M&A analysis and remember to get in touch with our experienced team with any questions you have about the M&A process and how Benchmark International can help you.

Weetabix 2

7-Eleven Inc, the premier name and largest chain in the convenience-retailing industry, recently announced that it has entered into an asset purchase agreement with Sunoco LP. As part of the agreement, 7-Eleven will acquire approximately 1,108 convenience stores located in 18 states.

The acquisition of Sunoco’s gasoline convenience stores sees an increased investment from the Japanese retail store owner Seven & i Holdings Co in the US. This is Seven & i’s most ambitious deal to date and follows the company-wide restructuring a year ago, when it announced plans that included divesting some of its department stores and boosting profits at 7-Eleven Inc. through increasing sales of private label products.

The deal will bring more than one thousand new gas stations and convenience stores to Texas and the Eastern US in a move that sets out to offer consumers greater convenience while improving 7-Eleven’s profitability. Sunoco’s retail unit reported a revenue of $7.7 billion in 2016.

This deal represents a long term investment, with 7-Eleven also committing to receive gasoline from Sunoco for the next 15 years and with a plan to grow the number of retail outlets to 10,000 stores by the year 2020.  It is estimated that Seven & i will show an increased operating profit of six per cent, to $3.5 billion for the 12 months ending February 2018.

The traditionally sluggish sectors of oil, gas and mining industries are starting to see a renewed revival across the globe, marked by Asian investment into overseas interests that is driving growth and development.

Gold rush

The Shandong Gold Mining Co, based in China, secured a 50 percent stake in Barrick Gold’s Valdero gold mine in Argentina, valued at $960 million. The company beat rival Chinese firm Zijin Mining Group Co to buy half the Veladero gold mine, owned by the Barrick Gold Corp, offering the Chinese mineral giant strong opportunity for growth in a new market.

Fuelling development

Looking at the wider industrial sector, Royal Dutch Shell is looking to divest some of its New Zealand portfolio, with the sale of its 50 percent stake in New Zealand’s second largest gas field, the Kapuni Gas Field, increasing their holding to 100 percent in the joint venture that operates the field. This is the first indication that Shell is reviewing its business interests in New Zealand, following the worldwide slump in energy prices.

Stay tuned to our blog for industry M&A news and updates, and get in touch with our experienced team with any questions you have about the mergers and acquisitions process and how Benchmark International can help you.

M&A Gas 1

In a move announced on 5th April 2017 and comes hot on the heels of last month’s high profile DowDuPont mega-merger, valued at $130bn, ChemChina has won conditional EU antitrust approval for its $43 billion bid for Syngenta, a Swiss pesticides and seeds group.

The deal, expected to close in the second quarter of 2017, is another recent acquisition that is set to redefine the global agricultural chemicals market. The takeover gives a nod towards acknowledging that it is important for European farmers to keep sufficient competition in the pesticide market, while at the same time giving the China-based business scope to boost its domestic agricultural output within the overseas chemicals market place.

European Competition Commissioner, Margrethe Vestager, was clear that competition in the sector would remain “effective” and that planned asset sales would address any concerns.  Plus, Syngenta shares were trading up 1.1 per cent after the antitrust clearance was announced. US antitrust authorities also agreed to the deal on the condition that ChemChina divests three product lines.

Accordingly, ChemChina will sell off a large chunk of its subsidiary Adama’s pesticide, herbicide and insecticide business, its seed treatments for cereals and sugar beet and a substantial part of its plant growth regulator business to American Vanguard, in a deal for an undisclosed fee.  Other major global players including BASF, FMC, Nufarm and Sumitomo have not yet commented on the deal.

Looking at other chemical industry news, Dutch firm AkzoNobel is continuing to delay its meeting with US company PPG Industries to discuss a possible takeover. The proposed $26.1 billion takeover is not opposed by Akzo’s shareholders, but heads of the business have confirmed their opposition to the deal on the grounds that the PPG proposal not only undervalues its business, but would present difficulties with competition regulators.

In a statement, AkzoNobel has announced that it remains firmly focused on unveiling its plans for its independent future, which will be presented on 19th April to all stakeholders.  Akzo has also indicated that it would prefer to sell its chemicals division, which represents approx. one third of company profits, and remain as an independent business rather than enter takeover talks with PPG Industries.

PPG remains determined to make an offer, although few hostile takeovers of publicly traded Dutch companies have ever been successful. In accordance with Dutch stock exchange rules, there must be a formal draft offer submitted by 1 June 2017 or the deal will have to stay off the table for six months.

Stay tuned to our blog for industry M&A news and updates, and get in touch with our experienced team with any questions you have about the mergers and acquisitions process and how Benchmark International can help you.

Chemicals 2 

Benchmark International is pleased to announce the sale of Label Express Limited to Lynx Equity, a world-renowned manager of private equity funds based in Canada with a diversified portfolio of companies throughout North America.

For the past decade Lynx Equity has focused on 100% acquisitions of old-economy, North American businesses, before entering into the European market at the beginning of 2017.  Benchmark International assisted Lynx Equity with the successful acquisition of London-based SignalHome in February, and, with the purchase of Label Express, it is clear that the acquisition trail is proving fruitful.

Established over 30 years ago, Label Express is an industry leading provider of express labelling services, including in-house manufacturing and studio capabilities, to a wide range of underserved niche industries. The company’s strong customer service and sales departments have helped to consistently drive growth over the last seven years, and, today, Label Express is proud to be the label supplier of choice to its many clients.

Roger Forshaw, Associate Director at Benchmark International, who headed up the deal commented, “I am absolutely delighted that we’ve managed to find our clients an acquirer that not only shares the same ethos they instilled over 30 years ago, but also a buyer that will ensure the Label Express name continues long into the foreseeable future. This is made even more satisfying given our clients’ previous attempts to secure a suitable acquirer over the last three years – we are pleased that our efforts made the difference and resulted in a success story for all concerned. I would like to wish my clients all the best with the next chapter of their lives”.

ABOUT BENCHMARK INTERNATIONAL
Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $5B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 13 offices across the world, have assisted hundreds of owners achieve their personal objectives and ensure the continued growth of their businesses.

Label 1

Benchmark International are pleased to announce that a deal has been agreed for the sale of Scan Alarms & Security Systems Limited to Secom PLC.

As a privately owned company, Scan Alarms & Security Systems Limited pride themselves on delivering an exemplary service to all of their clients. Their business policies embrace the concepts of quality, perfection, progress and results. Each member of their team is committed to the attainment of these goals. Based at purpose-built premises in Mallusk, on the outskirts of Belfast, their highly skilled workforce is well placed to service clients throughout Northern Ireland.

“Since Scan Alarms was founded in 1980 we have grown and developed under the leadership and direction of my father, who ensured that our focus has remained on meeting customer needs through the provision of high quality and reliable security services. Our new association with Secom is a significant advance that will underpin our stability and capacity to provide professional security solutions in the years ahead,” said Leanne Place, Director of Scan Alarms & Security Systems Limited.

SECOM is a market leader providing customised security and fire solutions throughout the UK to homes, small and medium business, major high street brands, the Police and Government establishments, and the financial sector. They are a global organisation operating at every level and have made delivering exceptional customer service the ethos of their business and believe this has been the bases of their success and is contributing to their growth.

Speaking on behalf of SECOM, Managing Director Minoru Takezawa stated: “We have collaborated with Scan Alarms for many years in the delivery of security services in Northern Ireland. As our working relationship developed it became clear that our two companies shared a common philosophy of prioritising the provision of quality services to customers. This acquisition means that Secom will be much better positioned to offer comprehensive services to our growing blue chip national account customers in Northern Ireland.”

On behalf of everyone at Benchmark International, we would like to wish both parties every success for the future.

ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $5B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 13 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

%d bloggers like this: