AI Magazine Issue 2 2017

48 Acquisition International - February 2017 Rcapital recently won ‘UK Construction & Engineering Deal of the Year for the Renew Holdings PLC Acquisition of Giffen’, the story of which this special feature about the deal reveals. capital provides private investment, commercial expertise and hands- on support to transform and grow businesses. Working together with management teams, Rcapital focuses on driving performance and delivering results. We assess opportunities and make investment decisions within 24 hours. We are more than a turnaround investor, seeing potential in complex situations and working with management teams to share in success. Since 2004, Rcapital has made over 50 portfolio investments from a wide range of industries and geographic spread. Rcapital structures straightforward transactions to meet the needs of sellers, management teams, employees and stakeholders to resolve complex situations. We consider all investment opportunities; typically focussing on SMEs with a turnover between £5m to £200m, investing up to £20m. Giffen Group specialises in electrical, signalling and power works across the rail infrastructure. Giffen is of the UK’s most successful companies operating in the fields of signalling, electrical engineering and specialist building services. The business has carried out engineering works on behalf of clients such as London Underground and Network Rail for over 50 years. During that time, the business and its workforce of 150 staff based in St Albans had built up an enviable reputation for safety and quality of workmanship delivered by highly skilled and technically rigorous teams. Rcapital were introduced to Giffen as the chairman was retiring following 105 years of family involvement. Although the business had a strong brand and reputation, it was not performing to its full financial potential. Rcapital brought in outside sector expertise to join the management team to focus on its core competencies and complete a thorough operational and financial transformation throughout the organisation. This involved streamlining processes, to make the business more efficient and able to focus on what it was known and respected for. Using the established reputation on London Underground, the business sought to diversify into Network Rail, targeting a number of key frameworks and rail operators. The business now has a much wider base of customers operating core skills and competencies. The results have been order books rising to record levels. Company: Rcapital Name: Phil Emmerson Email: [email protected] Web: www.rcapital.co.uk Address: 5th Floor, 24 Old Bond Street, Mayfair, London W1S 4AW Phone: +44 (0)845 293 9888. Right on Track R DY160024 Right on Track On 1 November 2016, Giffen was acquired by Renew Holdings Plc. Giffen’s entire management team has remained with the company - and now reports into Amco Rail - Renew’s rail infrastructure business. Giffen has made transformational financial and operational changes that have resulted in growth during its time in the Rcapital investment portfolio. Giffen was expected to record revenue of approximately £22m and an adjusted profit before taxation of £0.7m for 30th November 2016. By acquiring the complementary skills of Giffen, Amco Rail is able to offer an expanded range of services across the rail network as well as creating opportunities for the Group to provide services to London Underground. Amco Rail is part of the Engineering Services Group supporting UK infrastructure and is listed on FTSE AIM 50. Factors conducive to a successful deal Cash is increasingly becoming a commodity – now more than ever it is the skills and experience plus funding that makes for a compelling case for turnaround and transformation. Building on a talented team it is important that relationships are built quickly. There is usually a lot of work to do very quickly, so it is important that time is invested at the start to initiate a strong working relationship for the future. By acquiring the complementary skills of Giffen, Amco Rail is able to offer an expanded range of services across the rail network as well as creating opportunities for the Group to provide services to London Underground. Amco Rail is part of the Engineering Services Group supporting UK infrastructure and is listed on FTSE AIM 50. The state of the industry today Inflation is set to rise, fuelled by the sharp fall in the pound, however the great unknown is whether wage inflation can stay ahead of general price inflation. Fanning concerns are other threats beyond Brexit such as Trump’s promise of a huge fiscal stimulus and threats to upend the global trading order, the Italian banking crisis and crucial elections in Europe. Despite all this uncertainty, there is still a large sum of capital that needs to be put to work, meaning the investment landscape is increasingly competitive with well-funded buyers and investors.