Mid-Year family office deals round up

09 August 2017

This year has seen a number of high profile deals by family offices and private investment vehicles and here I’d like to round up a few, whilst discussing broader themes.

Our Family Office Group within Deals covers a number of family offices and ultra high net worth individuals (UHNWIs) with a view to bringing family capital to mergers and acquisitions. We are seeing increasing investor interest in consumer brands and industrial products businesses with a strong recurring revenue element. Financial services also continues to be of interest to investors, in the sub sector of annuity books and longer tail liability portfolios.

For family offices, private investment vehicles, UHNWIs and alternative capital providers who adopt the “patient” strategy, we see opportunities in strong consumer brands, annuity and life books, staple foods, UK transport (including infrastructure). These areas could hold steady in the face of a slowdown in the economy which is being predicted in a few quarters. A number of European families’ are looking towards Spain, which is showing a very strong performance and could have a number of undervalued assets across sectors after the lack of economic growth the country experienced after 2008.

Acquisitions abound

JAB Holding Company, Thyssen/Bornemisza Group (TBG), LetterOne and Abercross Holdings are clearly active in mergers and acquisitions given their recent activity.  

Abercross Holdings bought Typhoo Tea (a UK tea brand) in March 2017.

The Reimann family, through their vehicle JAB, purchased the US based Panera Bread for $7.5 billion in May 2017, to add to their acquisitions of Peet’s Coffee, Caribou Coffee, Keurig Green Mountain and Krispy Kreme.

In April of this year, TBG, acquired information provider DTN for $900 million. In June 2017 LetterOne announced the biggest UK retail and consumer deal of the year with the acquisition of Holland & Barrett from KKR for $1.8bn (the deal will close in September 2017).

The month of August started off with a deal for Rapha, the elite British cycling company which was acquired by heirs of the Walmart family for £200m. As a team, we have done quite a bit of thinking around the interaction between personal ethos’ and the diversification decisions taken by the next generation in family businesses who may be involved with investments and acquisitions.

Divestments are occurring

It’s not just all about acquisitions, divestments are also occurring. J&F Investimentos which is the Brazilian investment arm of the Batista family, sold Havaianas flip flop maker Alpargatas to a prominent banking family’s investment arm (the deal was a co-investment between Cambuhy Investimentos Ltda, Itaúsa Investimentos SA and the fund Brasil Warrant). This certainly helps the narrative that families sell to other families. In another deal, J&K sold their dairy business Vigor Alimentos to Grupo Lala for a deal that had a reported EV of $1.6 bn.

Placements and fund raising

In the world of private placements, in July 2017 UBS through its UHNW and Family Office team has raised $325m for a social investment fund run by Bono, The Rise Fund. This is a significant placement, which may result in more placements into social investment funds. Our Global Fund advisory platform is seeing significant interest from families in our client base looking towards social impact funds that can deliver social returns alongside economic benefits.

Geographically diverse

The flow of interest inbound to the UK continues to be global. This year we have seen strong interest in the UK from North Africa, China, and the Middle East. Our US business also continues to see interest in parts of the stressed or distressed retail sector which has seen a very deep contraction in the past 24 months.

If you have any questions about attracting family office investment, or are a family capital fund looking for deal flow, please do contact me.

 

Omar Butt |  UK Deal Origination | Corporate Finance
Profile | Email | +44 (0)20 7213 8164

 

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