Will Shaw

Good to see our comments picked up regarding the confirmed cash bid for Keywords Studios today by EQT for £24.50 per share or just under 16x trailing Adjusted EBITDA; a large premium to the May 17th closing. This is a major deal that could kick start significant follow-on M&A activity and drive the KWS market leadership position through selective M&A and technology investment. The Bidco comprises EQT (51%) and is also flanked by heavy hitters including CPP Investments (24.5%) and Rosa Investments, subsidiary of Singaporean based Temasek who collectively manage north of $1 trillion in assets globally. “We see clear angles to create a services powerhouse of scale over the next five years and drive global integration around the service lines, in particular engineering, to make KWS the go-to shop for services globally,” Goodbody analyst Patrick O’Donnell wrote in a note. "There is also a clear angle on M&A with companies like Virtuos, an engineering/Art AAA service company in which EQT has a minority position,” he added. #videogaming #Consolidation #growth #gameservices

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#Hargreaves_Lansdown Hargreaves Lansdown backed the £5.4 billion bid for the FTSE 100 fund manager today from a private equity consortium, a deal that will end its time as a listed company. The Bristol-based finance firm has been listed in London since 2007. It said today that the final offer valued its shares at 1140p in cash and would include a 30p per share dividend for the financial year which ended on 30 June. Compared to the Hargreaves Lansdown share price before the approach was first made in April, the price is at a premium of over 54%. The consortium is made up of CVC, Nordic Capital and ADIA. Hargreaves Lansdown is named after its founders – Peter Hargreaves and Stephen Lansdown – who set it up as an investment tip sheet. It now runs a state-of-the-art trading platform from which clients can run their own portfolios and pensions. https://lnkd.in/dKpizupy

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Navigating New Tax Challenges: How Private Investors Can Use EIS to Offset the 2024 UK Budget Changes. The recent UK Autumn Budget has introduced several significant tax changes that affect private investors, making tax-efficient strategies more crucial than ever. Key changes include increases in Capital Gains Tax (CGT) and inheritance tax reforms that will particularly impact wealth transfer strategies and investments in small and unlisted businesses. For CGT, rates have risen from 10% to 18% for basic rate taxpayers and from 20% to 24% for higher rate taxpayers on disposals after October 30, 2024. Additionally, carried interest for fund managers will see an interim rate increase to 32%, with plans to tax it as income from April 2026. Furthermore, inheritance tax (IHT) relief on agricultural and business properties will now be capped at £1 million per estate, with only 50% relief available above this threshold starting April 2026​. These changes mean that private investors need to explore tax-efficient investments like those offered through the Enterprise Investment Scheme (EIS), which provides substantial tax reliefs. EIS allows investors to claim up to 30% income tax relief on qualifying investments and defer CGT by reinvesting gains in EIS-eligible companies. The EIS scheme also provides IHT benefits if shares are held for more than two years, which can help offset the tightened rules around IHT on business property. Given the increased tax burdens, the EIS offers a unique way for investors to support early-stage UK businesses while maximising tax efficiency under the new budget constraints. With these budget changes, it’s a good time for investors to consider how EIS can complement their portfolios.

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It’s always nice to see lower mid market PE firms successfully raising capital. Yes, fund raising since beginning 2023 has shifted quite strongly into much larger hands making fund raising harder for the smaller funds. However, this news from Apiary Capital LLP shows that the mid market continues to have a compelling investment story to tell and owner-managed companies in this space that are looking for capital to grow should be encouraged. #privateequity #midmarket Stuart Clowser Francesca Merlini https://lnkd.in/ezdjEw3D

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🌱🥩 PRIVATE EQUITY FIRM COMITIS CAPITAL ACQUIRES UK TOFU LEADER THE TOFOO CO The Tofoo Co has been acquired by German private equity firm Comitis Capital, which has taken a majority stake in the business, while the previous Japanese investor has exited Co-founders Dave Knibbs and Lydia Smith will continue as investors in the business and steer its next stage of growth in the UK and international markets. “The Tofoo Co has plans to grow further – both with existing and new customers and channels – and needed a strong and proactive partner to help that growth journey,” said Smith. “Comitis is a great fit as that partner for this next chapter of Tofoo Co’s growth journey.” “David and Lydia have built a remarkable enterprise that is ready for the next phase of growth. The Tofoo Co represents a great addition to our portfolio, covering the thriving plant-based food market,” said Comitis Capital managing partner Nikolaus Bethlen. The acquisition comes after The Tofoo Co had enlisted Piper Sandler to conduct an auction process for the Yorkshire-based business in April. Smith and Knibbs established The Tofoo Co in 2016 and capitalised on the rising interest in vegan food in the UK. Its products are stocked at every major retailer in the UK, and are used by foodservice giants like Starbucks, Holiday Inn, wagamama and itsu. The company has now overtaken Cauldron as the second-largest meat-free brand in the UK (with 10.5% of market share), behind only Quorn Foods. Read the full article here: https://lnkd.in/emvU-x9m #GreenQueen #plantbasedmeat #vegan #foodsystems #sustainability

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The Bank of England's cautious stance on LBO transactions is well-founded, especially given the current macro environment. Downturns often lead to higher insolvency rates, and the recent increase in the base rate by 500 basis points over the past two and a half years—from 25 basis points (16th Dec 2021) to 525 basis points (3 August 2023)—adds to the risk. However, amidst these challenges, there are strategic opportunities for sponsors to optimise their portfolios: 1. Interest Optimisation: Sponsors should critically assess their portfolio company's interest payments. Are they overpaying? Sponsors can strategically reduce leverage and optimise their capital stack by refinancing existing debt or exploring alternative financing structures. 2. Collateral Utilisation: Asset-based lending (ABL) transactions allow sponsors to leverage collateral effectively. Companies can secure additional financing without diluting equity using assets such as accounts receivable, inventory, or PP&E. ABL-funded transactions provide flexibility and liquidity, especially through restructuring. 3. Dividend Recapitalisation: Profitable businesses in segments where enterprise value multiples remain depressed could benefit from dividend recapitalisation. Sponsors can deliver quick returns to investors by issuing debt to fund dividends. As with any portfolio review, they need to be assessed on a case-by-case basis. ACP Cadence Advisory LLP's vast knowledge and experience in ABL can support any portfolio review including the onboarding of companies/new transactions and exploring the art of the possible.  As a trusted advisor, we represent the client (and only work for the client) and always endeavour to provide the best solution without exposure to unnecessary risk.. https://lnkd.in/ecgBfAbH #debtadvisory #privateequity #ABL #risk

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The latest monthly report from Phenix Capital Group shows growth of more than 10% in both the number of infrastructure impact funds on its database and the amount of capital raised by them over the last year, writes Ian Lewis. #impactinvesting #infrastructure #realassets https://lnkd.in/ewzizs_U

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Sebastian McCarthy's latest article highlights a significant trend: smaller firms are leading in performance. Oliver Gottschalg’s point that "the very smallest seem to find it easier to make it to the very top" is a testament to the power of agility and focused strategies. Key Takeaways 👉 ➡️ US growth investors are dominating the rankings  ➡️ European presence is strong with seven firms in the top 20   Discussion Point:  How are small-cap firms reshaping the private equity landscape? We'd love to hear your insights in the comments below 👇 🔗 Read the full article here: https://lnkd.in/eD93PGV6 #PrivateEquity #InvestmentTrends #GlobalMarkets #BusinessStrategy 

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The British Business Bank produced a great report last week on the performance of UK VC funds (link in comments) over the last 20+ years. As with all reports like this, it's really important to dig into the detail and not just rely on the headlines. In particular, I was keen to compare the performance of the best UK funds to those in the US. While accepting the limitations of the data (all performance data on VC is based on a very low sample size), it's still interesting to see how the UK funds in the BBB report compare to the Cambridge Associates US VC benchmarks. As you can see from the chart below, the top quartile benchmark for UK funds exceeded the US funds for the period 2002-2007. But the sample size for UK funds in this period is particularly low (eg just five funds for the 2004/05 period). Since 2008, the top quartile UK funds have underperformed the US benchmark, and since 2010 are much closer to the US median return than the upper quartile. There are some outstanding founders and companies in the UK and some strong-performing VC funds. But the reality of VC is that performance is driven by a small number of outlier investments. Without these, it's almost impossible to deliver 3x net returns to LPs. For the UK to really become competitive with the US, we need to see more UK-based companies able to scale and exit at valuations in excess of $5bn. Unfortunately, there are no easy solutions to achieving this. We consistently hear from our VC managers that there is no shortage of capital for the best UK companies. Where there is a shortage is in the number of world-class founders looking to build in the UK. Get this right and the capital (and returns) will follow.

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Macquarie Group today announced the offer of a new Additional Tier 1 capital instrument, Macquarie Group Capital Notes 7 (ASX:MQGPG), to raise $1 billion with the ability to raise more or less (Offer). The Offer includes a Reinvestment Offer for Eligible Macquarie Group Capital Notes 3 Holders (ASX:MQGPC). Shaw and Partners is pleased to be appointed as Joint Lead Manager to the Offer. The Margin is expected to be between 2.65% and 2.85% per annum and will be determined through the bookbuild. Distributions are non-cumulative and are expected to be paid quarterly in arrears, subject to the satisfaction of the Distribution Payment Conditions, which include that payment of Distributions are within the absolute discretion of Macquarie. The Distribution Payment Dates are 15 March, 15 June, 15 September and 15 December. The first Distribution is scheduled to be paid on 16 December 2024. Macquarie Capital Notes are Callable at MQG’s option on 15 December 2031, 15 June 2032 or 15 December 2032 (first approximately 7.25 years), or following a Tax or Regulatory Event. Macquarie Capital Notes 7 will Mandatorily Convert into Ordinary Shares on 15 December 2034 (subject to certain conditions), unless they are converted, Redeemed or Resold earlier. This offer is restricted to Australian Resident Wholesale clients (Sophisticated or Professional) and clients that receive personal financial product advice from a financial adviser to acquire Macquarie Group Capital Notes 7. For more information, please contact your Shaw and Partners adviser. The issuer of the securities is Macquarie Group Limited ABN 94 122 169 279. Offers of the securities will be made in (or accompanied by) a copy of the disclosure document, available at Macquarie Group Capital Notes 7 Prospectus - 19 Aug 2024 https://lnkd.in/grkEgpDk and you should consider the disclosure document carefully before deciding whether to acquire the securities. To acquire securities under the offer investors will need to complete an application form accompanying the disclosure document. For more information, please contact your Shaw and Partners Adviser.

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The announcement that Aquis Exchange has agreed to be taken over by European securities group Six may mark a significant deterioration in the UK market for SmallCap shares. Six make it clear their focus is on European markets (principally Switzerland and Spain) and this is where they intend to focus future growth for Aquis. With the LSE AIM market in a death spiral the only company that had been a proponent of IPO's in the SmallCap sector now looks as though its focus will move away from London

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Our UK mid-market Private Equity H1 2024 review is here! Despite a delayed start, momentum in Private Equity deals is on the rise, driven by the anticipation of more favorable market conditions. The prediction of a stabilisation in the deals market at the beginning of the year followed by a pickup in the second half has largely held true. While deals began slowly, the market remains cautious, leading to longer transaction closing times. Our report also provides insights from across the pond into US Private Equity activity and how the UK debt markets fared in H1 2024. Click on the link to find out more Grant Thornton UK LLP #grantthornton #privateequity https://lnkd.in/ertJAYe9

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Executive Edge: Issue Seven 'The Impact of Operating Partners In Private Equity' Read the edition, here: https://lnkd.in/e5tyD5J2   Within private equity (PE) firms, operating partners are key players in driving portfolio-wide success. They come with various styles and functions, from the hands-off supervisors and strategic mentors, to the hands-on interventionist experts.   Executive Edge, Issue Seven, written by Camino Search Managing Director and Founder, Harry Hewson, with our contributor, data analyst and researcher, Lauren Andrews, explores the different types of operating partner, what they do, how to hire them and what makes them a valuable addition to a PE firm and portfolio. --- #CaminoSearch

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Our Private Equity team has advised on over 15 deals in the second quarter of 2024. Rising activity levels seen in Q1 have continued into the second quarter of the year, reflecting an improvement in market sentiment across the UK and European Private Equity Sector. Increased clarity on interest rates and early signs that valuation gaps are narrowing has helped fuel recent upticks in activity. Find out more: https://lnkd.in/dr35qutM CMS Corporate/M&A Group #CMSlaw #privateequity #mergersandacquisitions #investment #funds

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The first half of this year has seen a return to high-value dealmaking across mergers and acquisitions. Fuelled partly by a surge in private equity buy-outs, this big-ticket uptick looks set to continue for the rest of the year too. For more, take a look at our H1 2024 Mergers and Acquisitions review: https://lnkd.in/ergmFjTS #MergersAndAcquisitions #MarketIQ #Mergers #Acquisitions

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PwC UK recently gathered 100 investors, corporates and public sector representatives in London to look at how we can create pathways for private capital in the Energy Transition. Despite the appetite and means of private capital, investing into energy transition is complex and there is a mismatch between what the private capital market is offering, and what we need for decarbonisation. If we are to fully harness its potential, we need to think creatively. Our event, "Bridging the Gap," brought together key perspectives on these issues, and generated new ideas for how private capital investors, big companies and governments can collaborate moving forward. For more insights, watch PwC's clip of the day and our insights paper will follow shortly. #Deals #Energy #PrivateCapital Matthew Alabaster I Naz Klendjian I Anna McGinley I Ajay Amin I Clara Cutajar I Elina Roine I Ricky Sandhu I Ram Ramachander I Jennifer Brake

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This morning a private equity consortium announced a recommended £5.3 billion cash offer for the London-listed asset manager Hargreaves Lansdown. The offer gives a generous premium of 54% to the share price on 11 April, when the consortium approached the target board, but only 16% over the last share price before the approach was disclosed. Moreover, the price/earnings multiple (to 30 June 24) of 16 times is relatively modest – for example, RBC took over Brewin Dolphin at 22 times earnings in 2022. The consortium has received “hard” undertakings to accept the offer in respect of just 20% of Hargreaves Lansdown’s share capital, so there is some room for a competing bid here. #manda #mergersandacquisitions #londonstockexchange #privateequity #hargreaveslansdown

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