ISSUE 172 MAY 2015 ICAEW.COM/CFF GROWTH ! OPPORTUNITIES ! EXPERTISE RUTLAND PARTNERS + PIZZA HUT, AND OTHER TURNAROUND RECIPES VENTURE BOOM POSITIVITY IN 2015 NORTHERN EXPOSURE CANADA’S $32BN PE MARKET “ I didn’t realise Baird has raised and managed more than $3 billion in private equity.” You may know Baird for our deep sector expertise, but that’s really just the beginning of our capabilities. With more than 100 offices on three continents and more than $1 billion in revenues, Baird offers insights, expertise and strong relationships with intermediaries and businesses around the globe. Access a truly global financial partner at BairdEurope.com. London Shanghai Chicago Milwaukee Robert W. Baird Limited and Baird Capital Partners Europe Limited are authorised and regulated in the UK by the Financial Conduct Authority (registered numbers are 124308 and 150154, respectively). Robert W. Baird Limited and Baird Capital Partners Europe Limited have approved this information for distribution in the UK and Europe. ©2015 Robert W. Baird & Co. Incorporated. Member SIPC. MC-43468. @ICAEW_CORP_FIN Join the faculty’s LinkedIn group: ICAEW Corporate Finance Faculty Contents May 2015 Issue 172 icaew.com/c! GROWTH ! OPPORTUNITIES ! EXPERTISE 04 Uncertainty ahead Marc Mullen writes about the general election for the last time 05 Faculty news Business breakfast in the north, Gibson Dunn comes on board, and faculty heads to Shoreditch 09 In numbers A mixed picture for M&A, 12 while economies recover slowly 11 Moulton Steel Jon Moulton questions de! ation FEATURES 12 Wild ambition Albion’s Craig Wildman on growing an innovative start-up 14 Europe unlocked? Four experts share their view on the potential of the proposed 14 Capital Markets Union 18 Turn of the wheel What does it take to rescue a brand? David Prosser speaks to the turnaround specialists 24 A solid start Jonathan Scudder on the impressive rise of ForgeRock 26 World of venture Jason Sinclair explores whether 18 last year’s record boom for venture capital will continue 30 Strong and free Brian Bollen looks at the M&A landscape of Canada REGULARS 32 Appointments 34 On my CV Anthony Foster, Travers Smith 26 CORPORATE FINANCIER MAY 2015 3 WELCOME An uncertain chapter OK – this is the last time I will start an editorial THE FACULTY Giles Derry mentioning the UK general election. For the next Chairman four years and nine months, at least, and then, Jim Keeling, Mark Pacitti Vice-chairmen like buses, my next three election-related David Petrie editorials will come along at once. Head of Corporate Finance Katerina Joannou This issue of Corporate Financier should land on your desk on the Manager, capital markets policy eve of the vote. You might be reading it before. If you’re a British Shaun Beaney reader, you may be taking the cellophane off, as you return from Manager, the polling booth. You might even know the outcome by the time Corporate Finance Faculty you read this. The odds on no overall majority are 1/8 – at time of Lorraine Sinclair writing. I always trust odds more than opinion polls. So, you may Services manager know the result, but not exactly who will run the country for the +44 (0) 20 7920 8685 next five years. fi[email protected] To borrow from a politician from across the Pond, former US Marc Mullen secretary of defence Donald Rumsfeld, there are certain certainties, certain Editor uncertainties and uncertainties we were even uncertain enough about to know they [email protected] might be uncertainties we should at some point consider. David Co!man, Nigel Crockford, M&A works on all of the following – some basic business fundamentals, some Victoria Scott opportunities and threats, and an innovative management team that can be trusted to Editorial advisers deal with that last category. A good blend of these is required. In this month’s cover story (pages 18-23), we look at the tough world of turnaround Corporate Financier deals. Last month, wine retailer Majestic announced a £70m ‘takeover’ of online wine is produced by Progressive Customer Publishing merchant Naked Wines. The deal could be described as a ‘reverse mutual turnaround’. John Carpenter House AIM-listed Majestic has been struggling. Majestic’s CEO Steve Lewis stepped down in John Carpenter Street February, apparently after poor festive sales. It is a bricks-and-mortar retailer, with little London international presence. EC4Y 0AN Naked has a strong online presence. Its sales had grown 40% to £74m last year, but Advertising enquiries it reported a loss of £3.4m. In September 2013 it raised £3m, largely from customers, [email protected] through a bond issue. Naked Wines founder and CEO Rowan Gormley has taken over as head of the enlarged group. ISSN 1367-4544 TECPLM13401 Turnaround investing is demanding in many ways for management. Majestic’s share Printed in the UK by Sterling price has not led to champagne corks popping since the announcement of the deal. Solutions Time will tell how the businesses integrate and management deals with the certain Corporate Financier is distributed certainties, the certain uncertainties and the stuff that comes from the left field. Or in to members of the Corporate the interests of political impartiality, right field, too. Finance Faculty. For details about corporate and individual membership, please visit icaew.com/c" or contact the faculty on +44 (0) 20 7920 8685 Marc Mullen To comment on your magazine, please Editor email [email protected] © ICAEW 2015. All rights reserved. The views expressed in this publication are those of the contributors; ICAEW does not necessarily share their views. ICAEW and the author(s) will not be liable for any reliance you place on information in this publication. If you want to reproduce or redistribute any of the material in this publication, you should first get ICAEW’s permission in writing. No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication can be accepted by ICAEW, the publishers or the author(s). Whilst every care is taken to ensure accuracy, ICAEW, the publishers and author(s) cannot accept liability for errors or omissions. Details correct at time of going to press. Icaew.com/c! 4 MAY 2015 CORPORATE FINANCIER NEWS & EVENTS Faculty news BOOSTING FINANCE FOR NORTH-WEST BUSINESSES Ron Emerson Cliff Maylor Andy Ball Louise Beaumont Jonathan Boyers chairman, chief executive, North chief investment officer, head of public affairs, corporate finance British Business Bank West Business Finance NorthEdge Capital GLI Finance partner, KPMG The Corporate Finance Faculty, Access to finance is vital if the supports more than 11,000 ICAEW’s North West region and members. Melanie Christie, the British Business Bank have North West is going to drive the ICAEW’s regional director, said together organised an ‘Northern Powerhouse’ it was very important that important breakfast forum in businesses can get access to the Manchester next month. established mid-sized NorthEdge Capital; Louise right sort of affordable "inance ‘Boosting Finance for companies. Businesses, Beaumont, head of public at the right time when they Business Expansion’ will be advisers and investors from affairs, GLI Finance; and want to invest in expansion. hosted by KPMG on Thursday across the north are invited. David Petrie, head of corporate “It’s vital in the North West if 4 June. A panel of high-pro"ile Ron Emerson, chairman of "inance, ICAEW. the region is going to help drive investors and advisers will look the British Business Bank, Jonathan Boyers, KPMG’s the ‘Northern Powerhouse’ with at how companies and will take part in a panel head of corporate "inance in innovation and skilled entrepreneurs in the north of discussion and Q&A that will the North of England and a employment.” England can access the "inance also include: Cliff Maylor, chief faculty board member, is For further information they need to invest in executive, North West Business hosting the forum at the "irm’s visit icaew.com/cff or email expansion – whether they Finance; Andy Ball, chief new St Peter’s Square of"ices. [email protected] are start-ups, early-stage or investment of"icer at ICAEW’s North West region or [email protected] GIBSON DUNN JOINS THE FACULTY International law firm Gibson “The initiatives of the a perfect complement to Gibson Dunn & Crutcher has joined the Corporate Finance Faculty, and Dunn’s world-class transaction “The initiatives Corporate Finance Faculty. its thought leadership on a approach. I am delighted that the of the faculty The firm’s global transactional range of issues impacting public firm is now a member of the practice works for a wide range M&A, private equity and capital faculty and excited about are in the sweet of clients, from multinational markets, are in the sweet spot of developing the relationship spot of our listed corporations to start-up our transactional practice. We’re between our two organisations.” ventures, in all major sectors. looking forward to contributing Geffen recently joined Gibson transactional Charlie Geffen, chairman of to the work of the faculty.” Dunn from Ashurst, where he practice. We’re London corporate at Gibson Selina Sagayam, an served as its senior partner. Prior Dunn, said: “Our London- international corporate finance to that he was head of its private looking forward based transactional practice partner at Gibson Dunn and equity practice. to contributing” is at the forefront of dual US member of the Corporate and English law capability Finance Faculty’s board, added: cross-border transactions. “I have worked closely with the We have particular strength faculty for almost 10 years now. Charlie Geffen, Selina Sagayam, chairman of international in M&A, private equity, finance The high-quality technical output London corporate finance and US and UK regulatory of the faculty and its cutting- corporate, partner, systems.