This year’s winner of the Corporate Finance Deal of the Year brings together
a Big Four firm as sole adviser to a Japanese multinational on its way to buying
a US-based nuclear power company owned by the UK government.
Winning firm KPMG succeeded in getting Toshiba to pole position in an auction
for Westinghouse in a multibillion-pound deal. Toshiba achieved preferred bidder
status for the nuclear engineering company - owned by British Nuclear Fuels -
in a transaction worth $5.4bn (£2.8bn), signed in February.
The judges said: ‘This groundbreaking deal is the kind of thing the
profession should be doing. It was a huge mandate for KPMG and stood out from
the pack like a beacon.’
With this deal, KPMG has done more than help the ambitions of a client to
bear fruit. It was responsible for suggesting the deal to Toshiba’s nuclear
division in the first place.
The firm knew of BNFL’s plans to sell Westinghouse back in 2004 and used its
awareness of the market to research potential buyers. After discussions with
KPMG Corporate Finance in Japan, the team concluded that Westinghouse would be
an excellent target for Toshiba.
Toshiba is one of Japan’s biggest nuclear power companies, but its nuclear
interests were not well established internationally and so there were doubts as
to whether it would be seen as a serious bidder. KPMG Corporate Finance used its
contacts with government and BNFL to market the Japanese energy player. It also
fostered strong relationships with senior Toshiba executives from its legal,
business development, HR, accounting, tax and engineering departments to support
KPMG’s own team is multidisciplinary, with members from three continents and
advisers in mergers and acquisitions, transactions services, the firm’s
environmental, tax and HR divisions.
In a truly international initiative, KPMG fostered Toshiba’s interests,
assisting with cultural differences in acquisition processes, negotiating style
and communication. The company now expects its nuclear power business to expand
threefold by 2015.
A NUCLEAR DEAL
The nuclear power sector is expected to see a resurgence over the next
decade. With gas prices remaining volatile and cost and environmental concerns
around the use of other fuel sources such as coal, experts predict the nuclear
market will grow by 50% by 2020.This deal sets Toshiba firmly on the
international stage in this sector.
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