BusinessCorporate FinanceMotoring breaks down – Swarfega cleans up

Motoring breaks down - Swarfega cleans up

While some sectors are looking good, the automotive industry seems to have hit the hard shoulder in terms of deals.

Pricewaterhouse-Coopers reports that the auto sector has seen the total value of M&A deals fall by 40% from a record breaking $35bn (£19bn) in 2002 to $21bn last year.However, deal numbers held, with 588 transactions last year against 621 in 2002.Philip Wylie, automotive corporate finance leader at PwC, said: ‘With intense competition among vehicle manufacturers, caused primarily by over-capacity, there is a continuing squeeze on component makers. Further consolidation will be a key factor in the survival stakes.’

  • Advisers at KPMG and PwC have played major roles in the £135m management buy out of the Deb group of companies. Barclays Private Equity took a majority stake in the business and were advised by KPMG, while the management at the skincare product manufacturer was advised by PwC. Roy Tilleard, finance director of the Derbyshire- based company, said: ‘The Barclays Private Equity buyout will enable Deb to remain independent, and provide a sound financial platform to continue its strong growth.’ Deb is the company that developed the Swarfega hand-cleaning product over 50 years ago. They also produce a range of other skincare products.
  • Around 35% of the most recent disposals after an acquisition were completed at a price significantly below the valuation of the vendors. The figures come from research carried out by KPMG Transaction Services, called ‘Increasing Value from Disposals.’ The study also revealed that delays in the completion process was the biggest problem faced by both corporate and private equity vendors. However, more than 60% of private equity sellers identified higher than expected deals costs as their biggest problem. The results came after interviews with decision makers in 155 corporate organisations and 50 private equity houses. To read the full research go to www.kpmg.co.uk.

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