Clairfield Newsletter - Syncap

CLAIRFIELD REVIEW
FOURTH QUARTER 2012
CLAIRFIELD EXPANDS IN NORDIC REGION
PCA Corporate Finance becomes partner in Finland
PCA Corporate Finance has joined Clairfield
as its exclusive partner in Finland.
It becomes the 17th firm in Clairfield International,
which focuses on providing
top-quality corporate finance advisory
services in middle-market crossborder
transactions.
PCA Corporate Finance is among the top
three investment banks in Finland in the
number of M&A transactions closed. The
firm celebrates its 20th anniversary in
2012. Its senior partners have worked
together as a team since the late 1990s,
giving PCA a proven advantage when
serving its clients. PCA’s services cover
advisory in M&A transactions as well as
in equity and debt financing. PCA also
possesses a significant market position
in the planning of equity-based incentive
schemes of major NASDAQ OMX
Helsinki-listed companies. PCA also has
strong experience in advising its clients
in Russia-related transactions.
PCA’s most recent M&A transactions include
advisory in the following deals:
• Alma Media’s acquisition of LMC,
the leading recruitment portal in the
Czech Republic, and the acquisition
of Finland’s most popular online
dating site.
• Logica, Varma and Sampo’s sale of
Silta, the leading payroll service firm
in Finland.
• 3i Group’s sale of Halti, the leading
sports clothing brand in Finland.
• Ingman Group’s sale of Ingman Ice
Cream to Unilever.
PCA has also recently advised Fortum,
Huhtamäki, Kemira, Outokumpu, Tieto,
Uponor and UPM in their equity-based
management incentive schemes.
“Companies in the Nordic countries are
very open to crossborder consolidation
ideas. Clairfield is, therefore, happy to
strengthen coverage in the region and in
PCA we found a firm with the same dedication
to building long-term relationships
with clients as all Clairfield International
firms,” says Albert Schander, director of
INDIAN OFFICE MERGES
Wizarth Advisors, a leading Indian boutique
investment bank focused on technology,
has joined forces with Equirus,
Clairfield International’s Indian partner.
The merger is part of Equirus’ strategy to
strengthen its IT and IT services practice,
which is an important crossborder sector.
Wizarth, under the able leadership of Ajit
Deshmukh, has built a strong tech practice
with 18 deal closures and some very important
client relationships in the IT space.
“The addition of the Wizarth team to
Equirus will strongly augment Clairfield’s
tech capabilities in India,” says Ajay Garg,
managing director of Equirus. “Wizarth’s
working under the overall Equirus and
Clairfield platform will enhance product
offering and market presence in India, and
the merger will be beneficial to all entities
involved.”
Mr. Deshmukh will be joined by four other
team members. The team will be based in
Mumbai.
expansion at Clairfield International.
“Most of our M&A transactions are international
in nature. We have cooperated
with some of the Clairfield partner firms
for over 10 years and therefore, it was a
very natural choice for us to join Clairfield
International. We are very excited
to provide our clients with M&A ideas
and opportunities in countries such as
Brazil, India, and the USA, where we have
not had a local partner previously,” says
Ari Leppänen, managing partner at PCA.
INSIDE
• New office in Paris
• Brussels conference
• Swedish private equity
and value creation
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NEWS BRIEFS
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CLAIRFIELD EVENTS IN PARIS AND BRUSSELS
On September 26, Clairfield France celebrated
the opening of a new and larger
office in Paris with a cocktail party attended
by clients and international colleagues.
The new office is in the Place
de l’Etoile district, a few meters from
the Arc de Triomphe. It is located in the
former residence of the Spanish royal
Some of Clairfield‘s partners at the new Paris office
family, which was acquired in 1920 by
the French entrepreneur Pierre-Georges
Latécoère. Latécoère was the founder
of both Aéropostale (the precursor to
Air France, it was the first airline between
France, Africa and South America,
launching the careers of Saint-Exupéry
and Mermoz) and the Latécoère group
(aircraft manufacturing group).
The next day, Clairfield Belgium, in conjunction
with the Belgian Association of
Financial Analysts (ABAF-BVFA) and the
Brussels Finance Institute (BFI - Febelfin),
sponsored a conference on “New Business
Models: Implications for Corporate Governance
and Corporate Finance.” The speaker
was Arturo Bris, a professor of finance
at IMD and a research fellow at the Yale
International Center for Finance. Professor
Bris ranks among the top one hundred
ANALYSIS OF SWEDISH PRIVATE EQUITY
Sweden is a world leader in listed private equity, ranking fifth globally
in market capitalization. In spite of increasing interest from the investment
community, the private equity industry in Sweden has a negative
reputation and is criticized for creating value through high leverage,
multiple inflation, and severe cuts. Edward Flyborg of Clairfield Sweden
together with Emil Holmström at Stockholm School of Economics
analyzed this phenomenon in their study Value Creation Drivers in
Listed Private Equity Buyouts – An Empirical Study of 15 Swedish Buyouts
1998-2012. They analyze value creation drivers in buyouts from
the perspective of the private equity firm using a dataset of 15 completed
buyouts by private equity firms listed on NASDAQ OMX Nordic
Stockholm. The methodology used separates the value contribution of
leverage on the private equity firm’s return from internal operational
improvements and external variations in transaction multiples.
The results of the empirical analysis show that almost half of the private
equity firm’s return can be attributed to the use of leverage, with
the remainder due to EBITDA growth, cumulated FCF generation and
multiple expansion. The analysis shows that sales growth through addon
acquisitions, financed by new debt and internal FCF generation, is
the main underlying value creation driver. The results provide key insights
into the listed private equity business model.
The study shows that two factors are crucial for private-equity companies’
high yield. The first factor is sales growth. Private equity compa-
Professor Arturo Bris
most-read social scientists in the world.
His talk focused on corporate responsibility
and how corporate responsibility adds
value to companies. At the event Professor
Bris received the BFI 2012 chair. Afterwards
a cocktail reception was held in his honor.
nies focusing on driving growth in their portfolio companies. Increased
sales also drive profits which ultimately adds to the value of the company.
The study found that one very important way to increase sales
was to make add-on acquisitions to the original portfolio company. No
less than 13 of 15 portfolio companies completed at least one add-on
acquisition during the ownership period.
The second factor is the leverage effect. Private equity firms tend to
use more leverage in their acquisitions compared to listed companies.
Given that the price of the company becomes greater when it is resold,
more leverage increases the return on equity. The study analyzes the
size of this effect in detail. Financial leverage constituted 47 percent
of the total return in the transactions that the two authors studied.
Almost half of the return can be derived from the aggressive lending.
The result can be compared with similar European studies where the
leverage effect constitutes only 32 percent of total return.
The study attracted attention from the Swedish financial press and
reactions from business and private equity leaders. The CEOs of Ratos
and Bure, two private equity firms analyzed in the study, both agree
with the findings. “The study shows how important an efficient capital
structure is for creating value to the owners. At the same time it is
important to remember that high leverage is beneficial only if the underlying
business is developing positively,” Susanna Campbell of Ratos
told the Dagens Industri business daily.

SELECTED RECENT TRANSACTIONS
Client Situation overview Counterparty
Clairfield in Brazil and the U.S. jointly advised the four shareholders of Lamiflex in selling 85% of the company to Altra. Lamiflex is
the premier Brazilian manufacturer of high-speed disc couplings, providing engineered solutions to a variety of industries, including
oil and gas, power generation, and metals and mining. Altra, based in the U.S., is a publicly-traded leading global designer of
electromechanical power transmission products.
BakFin, the parent company of Baker & Finnemore Limited, a specialist manufacturer of “Starlock” push-on fasteners, was sold
to Titgemeyer, a German manufacturer of fasteners and other industrial products. Clairfield UK was appointed to advise the
shareholders on the disposal, having worked with them on the original MBO. A full list of international potential buyers was
compiled with the assistance of the Clairfield partnership, with approaches made to a number of parties.
SRI is the leading provider of reusable healthcare linens and basins processing, surgical instrument and device sterilization, and
product distribution services, reaching over 4,500 operating rooms in more than 500 hospitals and surgery centers across the
United States. Clairfield in Charlotte acted as financial advisor to SRI/Surgical Express, Inc. in its merger with Synergy Health plc
(LSE:SYR), a UK-based provider of outsourced sterilization services to the healthcare industry.
Data Storage, headquartered in Prague, provides IT services such as complex storage, backups, archiving, migration, and management
of data for corporate and public sector clients. Data Storage was founded in 1998 and is now the leading independent
data lifecycle management specialist in the Czech Republic. Clairfield in the Czech Republic advised Data Storage on its sale to
Kapsch BusinessCom, a European provider of communication and business solutions.
Cutters Gloves is a leading manufacturer of high-performance sports gloves for the football, baseball, soccer, golf, and training
industries. Cutters maintains unique supplier relationships with its manufacturing facilities in Southeast Asia and distributes
its products across the U.S., Canada, and internationally primarily through big box retailers, team dealers, and online retailers.
Clairfield International in Charlotte acted as financial advisor to Cutters Gloves in its sale to Shock Doctor, Inc.
SACCS is a specialist care business, providing residential therapeutic treatments for young children who have suffered early life
traumas. Clairfield UK worked with the shareholder to restructure the business and develop a relationship between SACCS and a
select group of potential buyers. The buyer, Advanced Childcare, is a leading national specialist childcare business. It has backing
from the US private equity group GI Partners.
Clairfield International in Charlotte acted as financial advisor to Vendor Credentialing Service, Inc., a market leader in the vendor
credentialing industry, in its recapitalization with The CapStreet Group, LLC. Founded in 2006 and headquartered in Houston,
Texas, Vendor Credentialing Service, Inc. is a leading provider of vendor verification and certification for healthcare facilities
across the United States.
NMT FenCS provides factoring and clearing services mainly for dental clinics in the Netherlands. Infomedics Groep B.V., a new
entity created by the merger of Infomedics and DFA on June 1st 2012, acquired NMT FenCS from NMT, the Dutch dental trade
association. Clairfield International in the Netherlands advised NMT FenCS on the sale.
Stuart Turner is a leading UK supplier of shower pumps for both the domestic and commercial markets. Clairfield UK advised
Stuart Turner on its acquisition of Empstead Works from Walden & Son (Henley) Limited. This collection of industrial units and
offices is a key long-term capital investment opportunity for Stuart Turner, while also enabling the company to benefit from
rental income in the medium term.
A 48% stake in Ellwanger & Geiger, the German private bank, was sold by the German regional public bank LBBW, to the investment
firm Dr. Helmig Vermögensverwaltung. The buyer of the stake is backed by the Helmig family, which formerly owned
the Helios chain of hospitals. This deal secures the long term independence of Ellwanger & Geiger. Clairfield International in
Germany advised LBBW.
Clairfield International in Charlotte acted as financial advisor to Carolina Medical Products Company, a specialty pharmaceutical
company, on its sale to Altaris Capital Partners, LLC, a New York-based investment firm focused on healthcare. Carolina Medical
makes products used in hospitals and nursing homes.
Pure Romance, Inc. is one of the largest and fastest growing woman-to-woman direct sellers of relationship enhancement products.
The company’s products are sold through in-home parties, which are planned by the Company’s extensive network of
Consultants throughout the United States, Australia, Canada, Puerto Rico, South Africa, and the U.S. Virgin Islands. Clairfield in
Charlotte acted as financial advisor to Pure Romance in its financing by Craig Capital Corp. and Fifth Third Bank.
Clairfield International in the Czech Republic advised BioVendor - Laboratorní medicína a.s. on the acquisition of a 100% stake in
TEST-LINE, Clinical Diagnostics, spol. s r.o., a laboratory diagnostics company based in Brno with international clients. BioVendor
is a biotechnology company specialized in development and production of immunoassays, antibodies and recombinant proteins,
and in vitro diagnostic products. BioVendor was founded in 1992 and is based in Brno.
Walden & Son
(Henley) Limited
Dr. Helmig
Vermögensverwaltung
Craig Capital Corporation
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THIRD CLAIRFIELD QUARTER REVIEW 2011
NEWSPAPER
FOURTH QUARTER 2012
NEW COLLEAGUES
Clairfield International in the Netherlands recently made three
new appointments. Joscha van den Bos, associate partner, has
12 years of experience in corporate and structured finance. Prior
to joining Boer & Croon he worked as an executive director
of M&A advisory at ABN AMRO in Amsterdam. He gained extensive
experience in international midmarket buy- and sell-side
advisory services. His industry experience includes professional
services and manufacturing. Mr. van den Bos was involved in
numerous M&A transactions, most recently the sale of Warner
Lewis GmbH to Velcon LLC, the sale of Twin Filter BV to Velcon
LLC, the merger of Koninklijke Reesink DIY with Ter Hoeven
Group, and the sale of various assets of Van Straten Medical BV
to Wright Medical Technologies, Inc. He holds a master’s degree
in economics from Erasmus University Rotterdam and is a CFA
charterholder. Geert Moed was appointed as a business analyst
after completing a four month internship. Mr. Moed holds a
bachelor’s degree in international business administration and
a master’s in finance & investments, both obtained at the Rotterdam
School of Management. His master’s thesis dealt with
the effect of government intervention on bank lending in the
2008 financial crisis. During his studies, Mr. Moed gained experience
at several junior consulting and administrative positions
CLAIRFIELD INTERNATIONAL PARTNER FIRMS
at various healthcare institutions. Sjoerd C.W. de Jong was also
appointed as a business analyst after completing a four month
internship. Prior to joining Clairfield, Mr. de Jong studied at the
Vrije Universiteit in Amsterdam and the UCD Quinn School of
Business in Dublin. He holds a bachelor’s degree in economics
and a master’s degree cum laude in finance. During his studies,
he gained relevant work experience at a small accountancy firm
and a corporate finance boutique.
Clairfield in Finland has recently recruited Kimmo Voutilainen
to join the Helsinki team as an associate. Mr. Voutilainen has
five years of experience in corporate finance and strategy, having
worked as an analyst for Sanoma Corporation and Ernst &
Young Corporate Finance, where he participated in various domestic
and crossborder M&A transactions. He has a master’s
degree in economics from the Helsinki School of Economics.
Two junior analysts who are completing master’s degrees at ES-
ADE in Barcelona have joined the Clairfield Spain office. Xavier
Cairó works on valuations. Sergi Amat will be managing Clairfield’s
research desk.
Country Firm Phone Website
Australia InterFinancial +61 7 3218 9100 www.interfinancial.com.au
Belgium SynCap Belgium +32 2 768 05 69 www.syncap.be
Brazil V2Finance +55 11 3283 1146 www.v2finance.com.br
Czech & Slovak Republics Patria Corporate Finance +420 221 424 111 www.patriacf.com
Finland PCA Corporate Finance +358 207 613 910 www.pca.fi
France intuitu +33 1 4020 1234 www.clairfield.com
Germany SynCap Management +49 69 70 79 69 0 www.syncap.de
India Equirus Capital +91 22 265 30600 www.equirus.com
Italy K Finance +39 02 763 948 88 www.kfinance.com
The Netherlands Boer & Croon +31 20 301 4751 www.boercroon.nl
Poland Central Europe Trust +48 22 583 68 50 www.cet.com.pl
Spain Clairfield International +34 93 487 0330 www.clairfield.com
Sweden R & R Partners +46 8 566 133 90 www.rrpartners.se
United Kingdom Orbis Partners +44 121 234 6070 www.orbiscf.com
United States - New York Clairfield International +1 212 370 4343 www.clairfield.com
United States - Charlotte McColl Partners +1 704 333 0525 www.mccollpartners.com
DISCLAIMER: No part of this report may be reproduced without the written permission of Clairfield International or one of its partner firms. The information herein has been obtained from sources that we believe
to be reliable, but we do not guarantee its accuracy or completeness. While we endeavour to update on a reasonable basis the information presented in this report, there may be regulatory, compliance or other reasons
that prevent us from doing so. Much of the information contained in this report is subject to variation due to changes in market conditions, legislation or regulatory matters and Clairfield International does not undertake
to notify any recipient of the report of changes to the information contained herein. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. Additional
supporting information is available upon request. Please contact: Research Desk, Clairfield International, Tel: +34 93 487 0330, email: press@clairfield.com.
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