«Deal of the Month
WHAT'S NevpS Issue 3 Marei 998
deals
The cliënt Ocean Group
The deal Ocean Group's NLG
200 million acquisition of Van
Ommeren Intexo.
The players Nicolas Thum of
London Branch's Corporate
Finance/M&A and Ben Hudig
of Utrecht Branch's Corporate
Finance/M&A).
specialist logistics division, is
unique in the Benelux and in
Europe as a whole. It supplies
technologically sophisticated
logistics services on an
outsourcing basis to high-
growth globalizing industries
such as electronics and
London's
Nicolas
Thum
Ocean Group's successful
acquisition of Van Ommeren
Intexo ranks among the more
impressive achievements by
our M&A arm to date. Ocean
Group is one of the most
highly-rated transport groups
on the London Stock
Exchange. It enjoys a market
capitalization of around GBP
I billion. In a fast evolving
larket, the group was known
to be shopping for a major
strategie acquisition on the
European continent. Indeed, its
acquisitions war chest, valued
at some GBP 500 million, was
well-publicized as early as
1996. And there was no
shortage of banks willing to
provide ideas and execute
potential deals: the investment
banking arms of Merrill Lynch
and SBC Warburg (their house
bank) were two of our
prominent competitors. From
a standing start, Rabobank
International M&A specialists
were able to win an exclusive
mandate and they conceived,
litiated, and executed this
omplex transaction in what
was to be the Ocean Group's
most important strategie move
in at least 5 years.
Intexo, Van Ommeren's
pharmaceuticals. lts strategie
geographical location in the
Netherlands, a key distribution
centre to the European
hinterland, added to its
attraction. 'Intexo had very
high scarcity value on the
market,' remark's London's
Nicolas Thum. 'The fact that
we were able to open the
company up for purchase by
our cliënt, and at the same
time avoid a free-for-all
bidding war in which everyone
would have lost, was the
essence of our achievement in
this deal.'
In late 1996, the company had
three leading shareholders.
These included management,
ABN Amro, and Van
Ommeren itself. All repeatedly
stated that Van Ommeren
Intexo was most definitely not
for sale. According to Thum,
'it was an uphill task to
convince each of the three
shareholder groups that this
was actually in their best
interest - and also that they
should proceed on an agreed
basis with our cliënt rather
than pursuing the auction
route.'
Initial contact was taken with
Ocean Group in November
1996 - 'we cold called them,'
Thum recalls. In making our
presentation, we were able to
make the most of our specialist
transport experience in M&A
gained with other clients
including NFC, Hays, Geodis,
and Christian Salvesen. From
there, it took till April 1997
before we were actually able to
edge out the competition and
sign the mandate under which
we were eventually engaged. In
May, preliminary contacts
were made with Intexo, which
in turn led to more detailed
discussions that lasted through
the summer. An exchange of
site visits in August graphically
illustrated the wisdom of
Ocean Group's takeover
strategy, and September
brought the agreement in
principle by the target board to
proceed.
In order to fulfil our mandate,
it was necessary to structure
and negotiate a complex 3-way
transaction that met the
differing needs and objectives
of all the various shareholder
groups. It was especially
important that the
arrangement ensured the
continuing loyalty and support
of Intexo's management,
whose talents are so important
to the company's continuing
strong performance.
After a highly detailed
structuring and valuation
exercise, members of the
M&A team from London and
Utrecht then proceeded to
negotiate a heads of terms,
which was finally agreed by
the disparate shareholder
group last November, almost
exactly one year after the deal
was initially mooted. Intexo
received numerous approaches
both before and indeed during
the construction of the deal -
which was formally closed on
the afternoon of December
31st. But we were able to
deliver an important strategie
objective for Ocean Group,
now a valued Rabobank
International cliënt, and to
move forward without being
obliged to participate in an
auction. The group's impressed
finance director later
commented that 'this was one
of the most complex private
transactions I have ever been
involved in.'
For our M&A operation,
which has hitherto tended to
leverage our strong balance
sheet and tax structuring
talents in pursuit of mandate
and deals, this transaction was
exceptional. It also generated
high advisory fees - without
adding to our balance sheet
exposure. But the cliënt, as
always, comes first. On the
basis of having delivered this
superlative added value, we
have been selected once again
by Ocean Group for help with
two further mandates. And in
M&A, it is the repeat
mandates that are the truest
sign of success.
Ben Hudig
from M&A
in Utrecht
