Corporate Review 2008
02
     We went from 9th to 5th in the Sunday Times deal makers
     list, we retained our market leadership in the North ...
03
Welcome to Halliwells Corporate                                Executive Summary
Group’s review of deal activity 2008. ...
04
 2008: A Year of Two Halves                                        The result of this was that 2008 was a turbulent yea...
05
Legal Advisers: Deals by Volume                  North West   Legal Advisers: Deals by Volume             Yorkshire
 20...
06
 M&A and International Highlights                                           This ranges from IPO work (albeit there is ...
07
Private Equity                                               We also advised on the formation of 3 new funds and
      ...
08

     We continue to advise a portfolio
     of 55 AIM quoted Clients.
09
Capital Markets                                                Company                       Deal                Enterp...
10
 Emerging Companies                                          2009: What Next?
 and Venture Capital
                    ...
11
We believe that deal volume in the first half of 2009 will
be down on that in the second half of 2008, with the
prospec...
www.halliwells.com
                 Halliwells LLP is a limited liability partnership   Halliwells LLP Tel: +44 (0)844 875...
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Corporate Deals Review 2008

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In putting this review together, we wanted to take a look
back at our own activity in the transactional market in
2008, look at the deals we have done in our 4 core focus
areas – M&A, private equity, capital markets and finance
– and to offer a view on what 2008 tells us about what to
expect in 2009.

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Corporate Deals Review 2008

  1. 1. Corporate Review 2008
  2. 2. 02 We went from 9th to 5th in the Sunday Times deal makers list, we retained our market leadership in the North West and we had a fantastic first year of operation in Yorkshire.
  3. 3. 03 Welcome to Halliwells Corporate Executive Summary Group’s review of deal activity 2008. The key highlight of the year for us has been achieving a deal volume of 192 deals for 2008, only 10 fewer than In putting this review together, we wanted to take a look we worked on in 2007. This performance was helped back at our own activity in the transactional market in enormously by a record Q1 and a strong finish to the 2008, look at the deals we have done in our 4 core focus year. Since June, 2008 has been the worst market areas – M&A, private equity, capital markets and finance that most of our partners have ever worked in. During – and to offer a view on what 2008 tells us about what to this period, we have cemented our market leadership expect in 2009. position in the North West and continued to grow our For many people active in the corporate finance market business more widely in the UK as a whole – evidenced in 2009, the economic firestorm of the second half of by our recent Sunday Times number 5 ranking for UK 2008 is the first serious downturn that they have worked wide deals in 2008. through. This is a challenge in itself, but the rapid • Number 5 Corporate Law Firm UK wide – deterioration in the global economic climate The Sunday Times and the issues that presents for UK plc means that the transaction landscape has changed for • UK Top 10 on MBO / MBI 2006-2008 – Corpfin the foreseeable future. • Number 1 AIM Law firm in the North 2000-2008 – Corpfin In analysing our deal activity in 2008, we have used both externally available statistics (mostly from Corpfin/ • Shortlisted for Corporate Law Firm of the Year 2008 – Experian) and our own internal statistics. Many of the Insider Dealmakers Awards deals we work on are, for one reason or another, not • Number 1 Corporate Team in North West 2007, publically disclosed. These deals are measured using 2008 and 2009 – Insider the Corpfin criteria and we use them to look at our • Number 2 in North West on MBO / MBI performance from year to year. 2006-2008 - Corpfin For the UK as a whole in 2008, Corfin reported a 21.5% • Number 1 for IPOs and Public Fundraisings in North fall in deal volume and a 54% fall in deal value. Worst hit West 2006-2008 - Corpfin appear to have been the very large, leveraged deals, but • Number 1 for Development Capital deals in North the value falls have affected the market as a whole. West 2006-2008 - Corpfin 2008 was a good year for Halliwells: we went from 9th These successes come down to two things: the strength to 5th in the Sunday Times deal makers list, we retained and breadth of our client relationships; and the strength our market leadership in the North West and we had a in depth of our team. Be they corporate, institutional, fantastic first year of operation in Yorkshire. Probably management or entrepreneurial clients, our relationship the best achievement of all, we all but maintained our with a wide spread of clients is the cornerstone of our deal volume 2007 to 2008, seeing only a 5% reduction. practice and something we believe has allowed us to Equally as pleasing given the 54% UK wide fall in deal maintain our deal volume performance. The ICAEW value was our performance in seeing only a 15% fall in Corporate Finance qualification that a number of our overall deal value, reflecting the quality of deals of which partners hold, coupled with our approach of becoming we worked. our clients’ trusted legal AND business adviser, are illustrative of the added value we deliver and which we believe differentiates us from our competitors. Halliwells’ Corporate Review 2008
  4. 4. 04 2008: A Year of Two Halves The result of this was that 2008 was a turbulent year but, in the end, one that was a success for us. Based Overview on our own internal statistics, we advised on 192 (2007: 202) transactions with an aggregate value of £4.6 In April 2008, the business and legal/accountancy trade Billion (2007: £5.4 Billion). Corpfin is reporting a 21.5% press was full of stories about record deal volumes decrease in deal volume UK-wide in 2007. Our average in March on the back of the change in the Capital deal value is £24m (2007: £27m). Gains Tax regime. Indeed we enjoyed our best ever Q1 performance – 67 deals worth £2.2 Billion. The tax In a very difficult market, especially on the back of change simply accelerated deal flow such that many some terrible economic news in the second half, we are deals that would have taken place in April, May and very pleased to have all but maintained our annual deal perhaps June were sucked into Q1 by the 10% tax rate volume at the 2007 level and seen only an 11% fall in which sellers were understandably focussed on securing. average deal value. Q2 as a result was quiet, but there was still a decent Another feature of 2008 was the increasing geographic level of activity, such that by the end of June we had spread of our activity. We are well known in the North done 113 deals, 58% of the total for the full year. For West through our long established offices in Manchester us, that dropped off significantly in Q3 – the traditionally and Liverpool, but elsewhere we are still relatively early busy Q4 though, after a slow start in October, came in the development of our offices. We have not seen this through well, with December being a particularly strong hinder our ability to win good deals throughout the UK month for deal completions. as our national reputation continues to grow. Legal Advisers: Deals by Volume National 2008 2007 Deals 1 (1) DLA Piper 186 2 (2) Eversheds 157 3 (3) Allen & Overy 95 4 (7) Pinsent Masons 94 5 (9) Halliwells 91 6 (5) Linklaters 79 7 (4) Clifford Chance 76 8 (-) Jones Day 73 9 (-) Hammonds 72 10 (-) Norton Rose 67 Source – The Sunday Times - 4 Jan 09 Halliwells’ Corporate Review 2008
  5. 5. 05 Legal Advisers: Deals by Volume North West Legal Advisers: Deals by Volume Yorkshire 2008 2007 Deals 2008 2007 Deals 1 (1) Halliwells 59 1 (2) DLA Piper 28 2 (3) DLA Piper 46 2 (6) Hammonds 21 3 (7) Brabners 42 3 (3) Addleshaw Goddard 19 4 (2) Eversheds 30 4 (4) Pinsent Masons 19 5 (5) DWF 24 5 (1) Eversheds 18 6 (9) Cobbetts 23 6 (7) Halliwells 15 7 (8) Pinsent Masons 22 7 (5) Walker Morris 15 8 (4) Addleshaw Goddard 20 8 (8) Cobbetts 13 9 (-) Pannone 18 9 (-) Dickinson Dees 7 10 (6) Hammonds 15 10 (-) Dundas & Wilson 7 Source – Corpfin Source – Corpfin Legal Advisers: Deals by Volume South West Legal Advisers: Deals by Volume Midlands 2008 2007 Deals 2008 2007 Deals 1 (6) Ashfords 25 1 (2) Eversheds 47 2 (2) Eversheds 15 2 (1) DLA Piper 34 3 (8) Allen & Overy 14 3 (4) Wragge & Co 23 4 (1) Clifford Chance 14 4 (3) Pinsent Masons 22 5 (-) Halliwells 14 5 (5) HBJ Gateley Wareing 15 6 (-) Linklaters 12 6 (9) Halliwells 14 7 (3) Osborne Clark 12 7 (-) Cobbetts 12 8 (8) DLA Piper 12 8 (-) Lovells 11 9 (9) Jones Day 11 9 (8) Hammonds 11 10 (10) BPE 11 10 (-) Dundas & Wilson 11 Source – Corpfin Source – Corpfin Halliwells’ Corporate Review 2008
  6. 6. 06 M&A and International Highlights This ranges from IPO work (albeit there is very little of this at the moment) through to strategic review projects We had a good year in 2008, both in the UK and the first foray of Chinese companies into acquisitions and on cross border deals. in Western Europe. Our involvement in 3 significant deals in the travel sector We have a dedicated Asia team comprising both UK and emphasises our growing market share in that area as Chinese professionals. The team completed 6 IPO’s of we begin to become recognised as a leading adviser Chinese companies on AIM over the last 3 years and to travel businesses. Similarly in the transport sector, undertook a range of M&A and other projects for its our work with Stobart Group has enabled us to expand Asian clients. both our reputation and our relationships. We see both sectors continuing to consolidate. We also began to benefit from efforts invested into India. We advised on two substantial Indian deals in 2008 Internationally, we advised on projects in, amongst valued at a combined £190m. Each of these was others, India, China, Singapore, Australia, USA, a complex, multi-jurisdiction transaction. Canada, Ireland, France, Spain, Italy, Montenegro, Nigeria and Sudan. We have an extensive network of overseas law firms with whom we work on international projects. This is a We continued to secure business in the Asia Pacific bespoke Halliwells network of “good friends”. region (mainly China) and are involved in a number of significant projects on behalf of Chinese companies. Sale mandates Acquisitions Company Sector Enterprise Value Target Sector Enterprise Value Global Travel Group Travel £100m James Irlam Transport £60m Pontin’s Leisure £46m London Southend Airport Transport £21m Brookhouse Aerospace £43m Burns Anderson plc Financial Services £14m Richardson Projects Construction £40m Roadferry Transport £10m Tekton Software £21m WA Developments Transport £10m PCMG Business Services £n/d WFCA Integrated Media £8m Elegant Resorts Travel £n/d CPBEC Consumer Products £8m Carrier Travel £n/d Autogen Bioclear Biotech £6m M&A Highlights M&A Highlights Halliwells’ Corporate Review 2008
  7. 7. 07 Private Equity We also advised on the formation of 3 new funds and have a number of current mandates to advise on the set Without doubt, the environment for private equity deals up of “turnaround funds” – a sign of the times. changed radically during 2008 as the availability of the levels of debt that the sector has become used to Our private equity practice is well balanced in that we effectively dried up. Certainly, the really big deals just advise private equity houses, PE-backed companies, did not happen but for the most part though, historically, banks and management teams. Through this broad this has not been an area where we have applied our spread of roles on private equity deals, we are able to primary resource. Our focus has been on the mid-market provide high quality input on our projects with a full and this saw us advising Zeus Private Equity, Infinity understanding of the sometimes competing interests Asset Management, NBGI Private Equity and Isis Equity of the various parties involved. Partners in 2008. Client Deal Zeus Private Equity Investment in XLN Telecom Isis Equity Partners Investment in Carnell Zeus Private Equity Further investment in Hallmark Hotels NBGI Private Equity Investment in T Jolly Infinity Asset Management Fund formation 20:20 Mobile Group Equity Restructuring Fishawack MBO Training for Travel Investment by Aberdeen Development Capital Infinity Asset Management Investment in Goldshield Private Equity Halliwells’ Corporate Review 2008
  8. 8. 08 We continue to advise a portfolio of 55 AIM quoted Clients.
  9. 9. 09 Capital Markets Company Deal Enterprise Value Begbies Traynor Placing £15m In a year when IPO’s were all but impossible, we worked with our Main Market and AIM quoted portfolio to secure Cantono Placing and disposal £5m secondary fundraisings, support their deal activity and focus on critical compliance and corporate Byotrol Placing £4m governance issues. Carr’s Milling Placing £3m Our flagship capital markets deal for 2008 was advising Main Market listed Stobart Group on its £75m placing Capital Markets and open offer. We also advised Stobart on a £21m We continue to advise a portfolio of 55 AIM quoted placing in December to support its acquisition of companies and grow our list of Main Market clients London Southend Airport. Other deals include: which now includes companies such as JJB Sports, Stobart Group and JD Sports Fashion. Finance Our finance team has always split its work between Our finance team also plays a critical role for us in advising advising lender and borrower and this continued in 2008. our corporate clients on their borrowing arrangements, It was an extremely tough year in the banking sector, whether in connection with acquisitions and other projects and this will no doubt continue into 2009 as the banks or their day to day working capital facilities. and other financial institutions have limited capital to Despite the doom and gloom, we advised a wide lend and they concentrate on their existing range of banks and other financial institutions on lending relationships. a number of standout deals in 2008: We have continued to win panel appointments and now provide support for most of the UK’s major financial institutions. Client Deal Enterprise Value Bank of Scotland Development finance £410m UK Building Society Property finance £300m Bank of Scotland Restructure and property finance £115m RBS/HSBC/Rothschild Loan facilities £84m National Australia Bank Property financing £46m Lloyds TSB Acquisition and development capital £22m Barclays Invoice discounting £15m Yorkshire Bank MBO £12m RBS Property financing £11m Alliance & Leicester Term loan £6m Finance
  10. 10. 10 Emerging Companies 2009: What Next? and Venture Capital There can be little doubt that 2009 is going to be an Halliwells has a long track record of advising emerging, extremely challenging year for the UK economy as a high growth companies and their funders. In many cases, whole – and of course this will have an impact on deal we have worked with companies from their early stages, volumes and values. We believe that deal volume in the through acquisitions and into private equity deals, trade first half of 2009 will be down on that in the second half sales or IPO’s. We continue to work with a wide variety of 2008, with the prospect of more activity only if the UK of clients in the broad technology sector, specialist economy and business confidence in general can begin technology areas such as healthcare and life sciences its recovery from Q2 onwards. In terms of our own deal and in other areas of innovation. volume in 2009, we see maintaining our strong 2008 We regularly advise some of the UK’s most active performance as being a major challenge. venture capital funds including RisingStars Growth Much will depend on the way the banks behave and their Fund, YFM and Coalfields Enterprise Fund. Our appetite for deals once they re-enter the market. Pricing corporate client list features some of the UK’s most expectations are on their way down to a new “realistic” exciting young companies such as The Hut, winner level, which should help – but renewed confidence will of the Sunday Times/Bank of Scotland Entrepreneur be required across the economy in general before the of the Year award in 2008. market becomes more settled. For our part, we believe that our focus on the wide range of clients we advise, our “hands on” style and the resultant ability we have to differentiate our offering will serve us well in this difficult market. Halliwells’ Corporate Review 2008
  11. 11. 11 We believe that deal volume in the first half of 2009 will be down on that in the second half of 2008, with the prospect of more activity only if the UK economy and business confidence in general can begin its recovery from Q2 onwards.
  12. 12. www.halliwells.com Halliwells LLP is a limited liability partnership Halliwells LLP Tel: +44 (0)844 875 8000 registered in England and Wales under registered number OC307980 whose registered office is at 3 Hardman Square Spinningfields Manchester M3 3EB 3 Hardman Square, Spinningfields, Manchester M3 3EB. Fax: +44 (0)844 875 8001 DX 14317 Manchester 1 A list of members is available for inspection at the registered office. Any reference to a partner in relation 1 Threadneedle Street London EC2R 8AY to Halliwells LLP means a member of Halliwells LLP. Fax: +44 (0)844 875 8002 DX 98933 Cheapside 2 Regulated by the Solicitors Regulation Authority. City Plaza Pinfold Street Sheffield S1 2GU This brochure was published in January 2009 and is intended only as a general guide. It should not be relied upon Fax: +44 (0)844 875 8003 DX 10525 Sheffield as a substitute for taking advice in particular circumstances. Before acting on anything contained within this publication, The Plaza 100 Old Hall Street Liverpool L3 9TD please consult your usual Halliwells partner. Fax: +44 (0)844 875 8004 DX 14126 Liverpool 1 www.halliwells.com Ref: Halliwells 1142/01.09

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