AI Magazine Issue 12 2010

Out of Character & into China Eight Editor’s comment Contents News TomRogers is “The Deal Guru” Lead Mandate Mark Schweiger, financial director of CharacterWorld, explains howUK brands can access the fast growth Chinesemarket Deal of the Month Nikko Asset Management Co., creates a strategic partnership Deals in Detail Hurst’s Nigel Barratt discusses the return of the large deal Harney Westwood & Riegels LLP celebrates a golden year Kalliolaw serves growth Leading Advisers 2010 AI’s Leading Advisers summarise 2010 Deal Diary This month’s line up of the latest deals from an international perspective How to contact AI AI welcomes news and views from its readers. Correspondence should be sent to Acquisition International, Blakenhall Park, Barton under Needwood, Burton on Trent, DE13 8AJ. Telephone 0844 809 4788 or email reception@acquisition-intl.com. For more information about AI visit www. acquisition-intl.com . One According to the Ernst & Young Institutional Investor IPO survey 2009, China, technology and private equity are the likely markets and sectors that will lead listing activity in 2010. Investors believed a handful of IPO markets worldwide would show recovery by the end of 2009. China (75% of respondents) India (57%) and Brazil (57%) were highlighted as the most likely with the US (31%) and Singapore (30%) suggested, as other possibilities. Ernst & Young’s quarterly data has shown that this trend has already started in Q3 2009 and is likely to continue in Q4. For many of the developed markets like the UK, Australia and Germany (all 57%) and Canada (62%) investors believed domestic IPO markets will start to recover between Q1 2010 and Q2 2011. A surprisingly large minority in many major markets – in France and Japan up to 42% – of investors thought a recovery could be more than 18 months away. David Wilkinson, UK IPO partner at Ernst & Young, comments: “Recent IPO activity in the last two quarters confirms that some IPO markets are making an early recovery, notably in the emerging economies of China, India and Brazil. China-based companies in particular have been significant in driving recent capital market activity, with more deals than North America and Europe combined. Although, the rest of the world appears to be picking up, full recovery will take longer and we don’t expect markets to stabilise for another 12 months.” Forty-nine per cent of investors believe that the technology sector will lead IPO recovery globally, followed by financial services (43%), the oil and gas sector (38%), metals and mining (35%), consumer and retail (32%). Wilkinson says: “Technology companies often lead IPO recovery because they are perceived to have good market growth opportunities. “While it is not surprising that investors show an interest in mining and oil companies – given the rise in asset prices – it was unexpected to see a similar focus on financial services companies. However, we’ve started to see financial services companies stabilise. Those that have survived the economic downturn are now in a better position to attract investors than they have been for sometime.” “Private equity backed companies are playing a significant role in driving public offerings, and given the backlog of companies awaiting exit within their portfolios, they are poised to increase in importance,” says John Harley, Global Private Equity Leader at Ernst & Young. “Investors are looking for less risky investments, which mean that they are more concerned with debt to equity ratios and invest in companies that performed well in the downturn and are able to service their interest and debt. When the market returns, investors will require a track record of significant growth,” concludes Wilkinson. Merry Christmas and a happy “deal filled” new year! Charlotte Abbott - Editor charlotte.abbott@acquisition-intl.com 2 6 8 10 12 16 20 14 32 Issue designed by www.icandi.co.uk