Disclosure schedules are an integral part of any merger or acquisition (M&A) transaction. They contain information required by the acquisition agreement—typically a listing of important contracts, intellectual property, employee information, and other materials as well as exceptions or qualifications to the detailed representations and warranties of the selling company contained in the acquisition agreement.

An incorrect or incomplete disclosure schedule could result in a breach of the acquisition agreement and possible significant liability to the selling company or its stockholders. Indeed, a well-drafted disclosure schedule will provide substantial protection against post-closing allegations that the selling company breached its representations and warranties.

Now, because poorly prepared disclosure schedules have the potential for significant liability, it is important that they are compiled in both a careful and thorough manner. Any disclosure schedule that is prepared at the last minute, is ikely to be incomplete or inadequate thus creating problems to closing a deal or bringing unnecessary risk into the transaction.

Typically, the process of producing a disclosure schedule is undertaken by employees of the selling company, together with an outside M&A legal counsel. However, the schedules can require a significant amount of time to produce, meaning that the initial drafting should be undertaken early on. It’s not unusual for disclosure schedules to go through a dozen or more drafts and negotiations with the buyer’s counsel.

Common Mistakes Made in Preparing the Disclosure Schedules

There are a number of mistakes that are frequently made by the selling company when it comes to the production and preparation of the disclosure schedules. Below is a list of the more common ones:

  • The seller fails to include the right employees who have the necessary knowledge to assist in the preparation of the schedules. Although it is understandable for many reasons why a selling company limits the number of people that are aware of a possible deal, that small group frequently doesn’t have access to all the information necessary to complete the disclosure schedules.
  • The seller fails to carefully review every sentence of each representation and warranty of the seller it makes in the acquisition agreement, to determine what is required for disclosure. The language and thresholds for disclosure are imperative and will be negotiated between buyer and seller. Ideally, thresholds will be established so that the burden of disclosure is not overwhelming.
  • The capitalisation table is incomplete (such as incorrect amounts for stock, warrants, options, etc.).
  • The schedule for subsidiaries of the company is incomplete or doesn’t list the jurisdiction of incorporation or percentage of the subsidiary owned.
  • The list of material contracts is incomplete.
  • The description of the material contracts is inadequate (such as including the wrong title of the contract, not listing all amendments to the contract etc.).
  • The schedule of leases for the company does not contain all required information (such as title of the lease, landlord, date of lease, location etc.).
  • The intellectual property disclosure is incomplete (such as missing information about patents, trademarks, service marks, domain names, etc.).
  • The list of software used in the business (including any open source software) is incomplete.
  • The schedule for employees is missing salary, bonus, or other key information.
  • The schedules are missing the listing of any employment agreements or officer, director indemnification agreements.
  • The schedules on the largest customers or suppliers are missing key data (such as dollar amounts involved or a description of the relationship).
  • The disclosure schedule listing any key contracts that have a “change in control” provision is incomplete.
  • The disclosure schedule listing all employee benefits is incomplete or not descriptive enough.
  • The disclosure schedule for insurance policies is incomplete.
  • There is an incomplete schedule of any required disclosures regarding litigation, arbitration, investigation, or other governmental proceedings.
  • The schedule of any liens on the company’s assets is incomplete (such as failure to list the secured party, what contract it relates to, the date of the contract, and other relevant information).
  • The tax disclosure schedule is incomplete (such as failing to disclose all income tax jurisdictions the company is subject to, any pending or past tax audits, any delinquent tax returns, or any unpaid tax liability).
  • The disclosure schedule for bank accounts is incomplete.
  • There are incomplete financial statements or liability disclosures, which are required by the seller’s financial representations and warranties.

Tips to Make the Preparation of the Disclosure Schedules Less Burdensome

Given that disclosure schedules are crucial, yet time consuming, here are a few tips:

  • The seller has to start preparing the disclosure schedules very early on in a deal, even before the acquisition agreement is finalised.
  • The seller’s management team has to be alerted to the high importance of the disclosure schedules.
  • Key knowledgeable employees within the seller must be involved in the preparation process.
  • The disclosures need to be coordinated and tied to what is contained within the seller’s online data room.
  • Over-disclosure tends to be better than under-disclosure, but this has to be tempered with an understanding of the likely reaction to a disclosure from the buyer.
  • Every new redlined draft of the acquisition agreement must be circulated to the parties involved in the preparation process, in order for the appropriate modifications to be made.
  • The seller must be aware of developments in the business that may require updates to the disclosure schedules.
  • The seller’s M&A counsel should qualify the seller’s representations and warranties as much as reasonably practical by including “materiality” and “knowledge” qualifiers, in order to make the preparation of the disclosure schedules less problematic.
  • The seller’s M&A counsel also should endeavour to limit disclosures to lists of documents or matters, rather than descriptions of the contents of documents or matters (such as requiring a list of pending litigation rather than a description of each pending lawsuit); again, this approach reduces the work involved when preparing the disclosure schedules.

For more information about selling your business, contact our expert team at Benchmark International.

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Timing is, without doubt, one of the most critical factors in mergers and acquisitions; a recent report found that it is, in fact, the single most reliable predictor in terms of creating real shareholder value.

But why is timing so crucial?

Think Macro!

Acquiring a company is a risk that’s ultimately taken based on the health or otherwise of economies – and we’re talking about macro-economies here, looking way beyond the company in question, as opposed to the ‘micro’ environment of the business itself.

The big picture is that the right conditions for economic growth – with the accompanying revenue growth, market growth and profits – are required at the end of the day in order for the acquirer’s shareholders to reap the benefits of the deal; value creation in M&A depends on it.

No Time like the Present…For Now

Deals that were announced during the ‘economic bubble’ period of 2004 to 2006 bore out the importance of timing in the macro-economic sense, creating significantly greater shareholder value than deals that were announced at the peak of the economic cycle in 2007 or during the 2008 to 2010 ‘slide’.

The global economy is currently in a ‘recovery’ period, despite high levels of general uncertainty socially and politically, so now is a good time for deals.

Companies can – and do! – wait too long for election results, interest rate movements and so on and fail to move fast enough. Too long a wait can mean smaller returns during the window of growth, and “time is the enemy of all deals,” to quote FT contributor Richard Harroch.

This also impacts, of course, on the importance of swift and decisive execution in the deal-making process. Due diligence is crucial, but the movements of the wider economy must be considered at all times.

Other Factors

Timing isn’t the only predictor of success in M&A, however; deal size also comes into play, for example, and this will be the specific focus of an upcoming Benchmark International post. Watch this space!

For more information about selling your business, contact our expert team at Benchmark International.

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ROC Northwest are a residential care, domiciliary care and educational care service provider for young people with Autistic Spectrum Disorders, learning, physical disabilities and complex needs with associated challenging behaviour and young people with SEBD. Community inclusion and participation enhance and enrich young people’s lives both educationally and socially. ROC offer exceptional, individual quality environments that put young people at the centre of the programmes they operate.

Speaking about the deal, Benchmark International’s Chief Marketing Officer, Michael Lawrie said: “Benchmark International were able to facilitate a successful marketing campaign, resulting in a prospective future for all involved, with the synergies of both companies there for all to see. From everyone at Benchmark International, we would like to wish ROC Northwest every success for the future.”

This is just one example of the many companies Benchmark International has helped since its inception, and proof of our commitment to continue changing the way deals are done. Whether you’re contemplating a growth or exit strategy, our team is equipped to help you navigate the process.

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.

We are ready when you are.

Website: http://www.benchmarkcorporate.co.uk/
Client Testimonials on Vimeo:  https://vimeo.com/benchmarkinternational

Call Benchmark International today if you are interested in an exit or growth strategy or if you are interested in acquiring.

Entrepreneurs, by nature, are people who spend a considerable amount of time looking for the next opportunity. And for them, ‘the next opportunity’ often includes a suitable time to sell their company.

But what, practically, are the most common reasons for sale?

1. Business Value vs Liquidity

Getting hold of liquidity in your company is a valuable opportunity, because while there is always value in a business, there is no real liquidity until all or part of it is sold.

Given that business ownership is in and of itself a risky endeavour, it stands to reason that the longer you own the business, the greater ongoing chance that there’s a risk of failure. Seen this way, it can become clear that time itself is a risk and that liquidity should be a goal sooner rather than later.

2. Life Journeys

Entrepreneurs are only human, and being human involves a ‘life journey’. For business people, that’s typically a progression from being an ambitious young gun looking to ‘make it’, through to a successful business owner looking to ‘grow it’, to a veteran looking to ‘exit’.

In some cases, life-journey exiting may be due to a wish to retire or slow down, but it can also be a case of looking for new pastures, greater excitement or even greater challenges!

3. Risk Fatigue

When a business is young, entrepreneurs take risks more confidently; the company doesn’t hold much value yet, so there’s less to lose.

But as the company grows, do does its value, and entrepreneurs naturally become more conservative and more risk-averse.

In addition, as business owners age they tend to become more reluctant to devote time and energy to fixing problems within the business, and with risk comes change and a greater potential for problems need to be fixed.

4. Opportunity Knocks!

Opportunity can sometimes present itself in such a way that the circumstance itself becomes the reason for the business sale.

Examples include meeting an individual or team whose experience, reputation and/or chemistry are so obviously right for your company that it makes total sense to hand over the reins, or coming across a different venture that appeals overwhelmingly, to the extent that an existing business needs to be sold to make way. Sometimes, opportunity really does come knocking.

For more information about selling your business, contact our expert team at Benchmark International.

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Benchmark International has recently opened a new office in Cape Town, South Africa (see 3rd July blog post), headed up by Andre Bresler and Dustin Graham. This is an exciting development for Benchmark International, in a dynamic evolving market.

South Africa is a core strategic market for any global M&A team, as the country is the conduit for more than half of M&A activity across the African continent. In South Africa itself, the M&A market is expected to grow by some 66% over the next two years, making it one of the top 10 domestic markets predicted to witness the greatest M&A expansion worldwide.

Rises in local commodity prices, as well as more gradual economic and wider reforms, are set to help stimulate growth in the sector, especially among domestic investors. South Africa is becoming more and more integrated into the global economy, and it’s very much showing in the M&A market. Also, with the country’s in-bound foreign investment expected to increase significantly – so is the demand for specialist legal skills across borders.

M&A deals involving African markets were worth US$39bn in 2016 – an value increase of 49.1% compared with 2015. Top deals in the region in 2016 included Bidvest Group selling food service company Bid Corp to Bidvest shareholders (€5.7bn); Rockcastle Global Real Estate Co Ltd selling to New Europe Property Investments Plc (€3.5bn); and Coca-Cola Beverages’ re acquisition of a controlling interest in their African division from Anheuser-Busch InBev (€3.1bn).

Featuring strongly amid other African markets, Nigeria has a predicted M&A transaction growth rate of 62% over the next two years (the only other African market in the top ten countries worldwide aside from South Africa), having reported over $1.9bn of M&A deals in 2016.

For more information about M&A activities in southern Africa, contact our team at Benchmark International.

Brian L. Davis recently joined Benchmark International as a Director on the Deal Origination Team, with a primary focus on Major Transactions across the United States. Mr. Davis will concentrate his efforts working with business owners and entrepreneurs to bring the breadth and experience of Benchmark International’s years of experience and unique ability to maximize value for our clients as they seek to pursue a potential sale of their businesses.

Mr. Davis joins Benchmark International after over fifteen years of experience in senior level roles focused on sourcing and originating new clients for leading investment banks and Private Equity firms throughout the U.S. Prior to Benchmark, Mr. Davis was a Managing Director at one of the leading middle-market lending and credit firms in the US, Golub Capital. Mr. Davis previously held the position of Managing Director and Head of Business Development at one of the premier middle-market Private Equity firms in the US based in New York, Sentinel Capital Partners and also was the President of TPG Sourcing Advisors, where he led the origination efforts for one of the largest Private Equity firms in the world, TPG Capital’s middle-market fund, TPG Growth. Mr. Davis was also a Partner and the head of the Private Equity Coverage Group at Charlotte, NC-based McColl Partners, which was subsequently acquired by Deloitte Corporate Finance. His experience across the credit markets, his extensive access to private equity firms globally, as well as middle-market investment banking experience will provide tremendous value and insight to the core focus of Benchmark International—the privately held business seeking to maximize value in the complex world of global Capital Markets.

Mr. Davis stated, “I could not be more excited to join a world-class organization like Benchmark International and be able to leverage the extensive experience and unwavering work-ethic of our firm to achieve superior outcomes for our clients.”

Greg Jackson, CEO of Benchmark International stated, “We are delighted Brian has joined the immensely talented team of professionals here at Benchmark International. Brian brings a wealth of expertise and experience within the global M&A markets that I am sure will be value adding at all levels. He stands out most notably for his proven track record in investment banking, cross border deals, clear strategic acumen and a strong record of delivering value to shareholders. We are excited to see how his refreshing approach and entrepreneurial flare will assist our clients with their growth or exit strategies. Brian’s proven approach to origination excellence and delivering superior customer experiences is invaluable. I am confident that his leadership and long history of monumental success within M&A will be key in helping Benchmark International extend authentic, trusted solutions for our clients and be influential in advancing the global strategic vision of Benchmark International.”

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.

French rental car company, Europcar has made its fourth acquisition of the year in the form of Europe’s largest low-cost car rental agency, Goldcar.

Europcar announced in December that it was looking to spend up to €500 million on franchised companies, car sharing services or local rivals within the car rental sector in order to achieve its ambitious growth targets and remain competitive.

Caroline Parot, Europcar chief executive, commented that the acquisition was “an important step” towards achieving the company’s goal to strengthen its influence in Europe. She stated: “This strategic acquisition will increase our exposure to three major growth engines – the Mediterranean region, the leisure segment and the low-cost segment – and become a major player in the fast-growing European low-cost segment.”

Parot also stated that following recent acquisitions, which include Milan-based car sharing company GuidaMi, Europcar Denmark and Germany’s Buchbinder Rent-a-Car, the company is well placed to reach its annual sales goal of €3 billion and an underlying EBITDA margin above 14 per cent by the end of 2020.

Investors have declared the acquisition of Goldcar, which is based in Spain, as a smart and natural choice for Europcar due to Goldcar’s strong position on the Iberian Peninsula, a key target area for the French company. The acquisition is also expected to generate €30 million of cost synergies per year by 2020.

Goldcar chief executive Juan Carlos Azcona said the deal would help increase the growth prospects of both companies. He said: “We are very excited to be joining the Europcar Group, the leading player in the European car rental industry, and look forward to bringing our entrepreneurial know-how and low-cost expertise to the group.”

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.

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California-based Hewlett Packard Enterprise has been busy bolstering its portfolio to stay ahead in cloud computing, with even more acquisitions on the horizon.

This year, the company revealed purchases worth more than $1.5 billion and is looking to boost demand for server and storage products in order to stay ahead of competitors, such as Dell and Amazon.com.

These recent acquisitions come after CEO, Meg Whitman, split the computer and printer business and sold off software units in multibillion-dollar deals, giving the company a clear direction for the future.

During the company’s Discover Conference, Whitman commented: “Back when we were an enormous company with six or seven operating divisions, there were a lot of mouths to feed. Printing wanted to make acquisitions. PCs wanted to make acquisitions. Software wanted to make acquisitions. Now, we have a much more focused strategy.”

Hewlett Packard posted revenues of $9.9 billion in the quarter that ended April 30, lower than the $10.09 billion projected by analysts. This further cements the company’s acquisition plans as a way to boost revenues in the future.

In April, the company purchased online data storage specialist, Nimble Storage, in a deal worth approximately $1 billion. This deal followed the purchases of IT service management company SimpliVity, and Niara, which specialises in security analytics and network forensics, earlier this year.

At the Discover conference, Whitman made assurances that when it comes to acquisitions, the company would stick to core business activities, including servers, storage and networking, while aiming to keep its customers up-to-date with the latest advances in connected devices and hybrid computing.

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.

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Britain’s Competition and Markets Authority (CMA) has given the go-ahead for the £11 billion merger of Scotland-based asset management companies Standard Life and Aberdeen Asset Management.

Stating that it had decided not to refer the merger to a second phase in-depth investigation, the CMA has made way for the formation of Europe’s second largest fund manager and a global top 25 player, with £660 billion assets under management.

The CMA began a standard review in May to ensure the mega merger would not wipe out competition due to the company’s elevated position as the UK’s largest asset manager. While still awaiting approval from other regulators, shareholders on both sides voted overwhelmingly in favour of the merger to go ahead, with 99 per cent of Standard Life investors backing the deal, and 95.8 per cent voting in support on the Aberdeen side.

When the deal completes in August, the company will be Standard Life Aberdeen, with Standard Life’s Keith Skeoch and Aberdeen boss Martin Gilbert running the business as joint CEOs from its headquarters in Scotland. As well as combining to create a global industry powerhouse, the deal is expected to deliver more than £200 million in cost savings per year, with the fund manager expected to cut up to 10 per cent of its combined 9,000 workforce over the next three years.

This Is Money reported that Chairman of Standard Life, Gerry Grimstone, had declared the deal as “one of the most significant events” in the company’s history, while Simon Troughton, chairman of Aberdeen Asset Management stated the merger was a “landmark” for the firm.

This announcement comes after reports that Standard Life is also in merger talks with Scottish Widows, a subsidiary of Lloyds. However, the company has declined to comment on what it refers to as “speculation” at this stage.

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.

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RPC, the international design and engineering company, has cited recent acquisitions in the last financial year as key factor in its profits more than doubling.

Established in 1991, the UK-based specialist in polymer conversion in packaging and non-packaging markets has spent in excess of £1.3 billion on acquisitions since December 2015, which grew revenues by 67 per cent to £2.7 billion in the year to March 31.

Recent acquisitions of French bottle-top maker GCS and smaller British rival British Polythene Industries performed above expectations, helping RPC increase pre-tax profit by 105 per cent to £155 million.

In February this year, another major purchase was announced in the form of Letica Group for £552 million. The acquisition has reportedly started well for GCS and further expands the organisation’s foothold in the USA. 

RPC has also generated 73 per cent of profits from its international centres, which has helped the company start the new financial year in a strong position and in line with the organisation’s expectations.

RPC Chief Executive, Pim Vervaat, recently stated that the organisation will continue to find opportunities for growth through further acquisitions of companies that are aligned with RPC’s values.

Analysts have suggested RPC will look to strengthen its global position with acquisitions likely to take place in European countries and beyond over the next two 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.

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Benchmark International is proud to announce that it has, once again, been named ‘International Mid-Market Corporate Finance Adviser of the Year’ at the annual ACQ Global Awards.

This is an especially proud moment for Benchmark International as it marks the third time that it has secured this prestigious award, having previously won in 2014 and 2015.

Since 2006, the ACQ Global Awards have celebrated the achievements, innovation and brilliance of industry leaders, exemplary teams and distinguished firms, with the winners being chosen by their respective industries.

Upon receiving the award, Michael Lawrie, Chief Marketing Officer, said, “This award is testament to all the hard work that the team at Benchmark International puts in on a daily basis. We will continue to work tirelessly in order to deliver the best service to our clients and to retain our title next year.”

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A Manchester-based M&A specialist has expanded into South Africa with the opening of an office in Cape Town.

Benchmark International already has a significant presence in both the UK and North America, with its original Manchester base having been joined by offices in Oxford, New York, Tampa, Austin and Nashville.

Its Cape Town office will be headed up by Andre Bresler and Dustin Graham.

Bresler, South Africa managing director, said: “This is a very exciting time to be part of Benchmark International’s investment in South Africa.

“The country is a strategically important market for any M&A team, as it’s the conduit through which almost half of the continent’s M&A activity flows. South Africa also counts among the ten countries with the highest M&A growth predicted over the next two years.

“Benchmark International brings together the proven ability and capacity to address a very rapid increase in domestic demand for specialist M&A skills, especially concerning cross-border deals in this environment.”

James Thornton, Benchmark International chief operating officer, added: “South Africa represents a key element of our international growth strategy. The country has great potential as an investment destination, with a highly developed economic infrastructure and one of the most vibrant emerging market economies worldwide.

“South Africa’s financial and legal systems, with their similarities to their UK and North American counterparts, together with a familiar business culture and a very longstanding history of trade between these regions means that our expansion into South Africa is set to benefit our seller and buyer clients alike.”

After years of approaches, US-based Huntsman Corp and Switzerland’s Clariant AG have announced that they will merge to create a chemicals manufacturer worth more than $14 billion.

Last year, it was reported that talks had broken down between the two over a disagreement of who would play the lead role; however, a statement from Clariant AG announced that the deal will create a global specialty chemicals company that is 52 per cent owned by Clariant AG shareholders.

The deal brings together Swiss-based Clariant AG, maker of aircraft de-icing fluids, pesticide ingredients and plastic colouring, with Huntsman, a company based in Texas producing chemicals used for paint, clothing, and construction.

This shows the growing trend of mergers between chemical companies, especially in Europe, where companies such as BASF, Solvay, Evonik, and Lanxess have all agreed to multi-billion takeovers since mid-2015, whilst, as previously reported, industrial gases giants Linde and Praxair are planning to merge.

Chief Executive, Hariolf Kottmann, and Huntsman CEO, Peter Huntsman spoke of their shared professional and personal friendship over the past eight years, but that it was only in the last five weeks that talks had intensified.

“Hariolf and I had discussions as friends and as business colleagues. But this is the first time in all those years that we actually engaged our teams to actually get a deal done,” Huntsman told the media on a conference call.

Peter Huntsman will become the combined CEO of the new HuntsmanClariant, while Kottmann will become chairman. HuntsmanClariant will be headquartered in Switzerland with its operational centre in Woodlands, Texas.

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.

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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.

 

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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.

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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.

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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.

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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.

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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.

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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.

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