Deal of the month
Spain's SWEET VENTURE
18
deals
WHAT'S Nf,WS Issue 4 ApnM998
The cliënt De Lage Landen
(DLL)
The deal DI.L's sale of
Construction Equipment
Finance (CEF Ltd) with its
GBP 94m portfolio, to
Associates First Capital
Corporation.
The players Phil Green,
Maarten Viskaal and Rob
Morris-Jones (DLL UK), Jan
DuPre (DLL Eindhoven),
Denis McCafferty (DLL
Dublin). From M&A: Nicolas
Thum and Judith Hamilton
(London), working with the
M&A network, particularly
David Mamo and Roger Barr
(New York). Plus: Niek
Broeyer (relationship
management, Dallas), Paul
Florcruz (treasury, New York)
and in London, Yvette van
Lierde (Dutch desk), Mark
Blundell (international
corporates), Bill Farrant and
Andrew Stubbs (swaps desk),
Gordon Harris (loans
administration) and Lynn
Quilliam (customer services).
This month's deal is something
of an interesting hybrid in that
our London M&A operation
had to match the requirements
of an internal cliënt, DLL, with
the strategie needs of an
external one, namely
Associates First Capital
Corporation, an existing
customer of our Dallas Branch.
As reported in our Fehruary
issue, DLL recently announced
plans to focus its international
activities in the growing
vendor finance field. The sale
of Construction Equipment
Finance (CEF Ltd) - a
subsidiary of DLL and a
leading independent equipment
finance specialist in the UK - is
a result of this strategy. Our
London M&A team were
retained as financial advisor to
maximize shareholder value
and the potential return on this
investment. In order to meet
this goal, a structured and
controlled auction, involving
some 30 potential globally-
active buyers on several
continents, was undertaken.
This involved a coordinated
approach to tier-1 candidates
in the UK, other parts of
Europe and the US. 'One of
the big challenges was
managing the information
associated with this
transaction,' says London's
Nicolas Thum. 'In view of the
timetable we were working to,
it was essential to keep the
process moving and all the
interested parties in place. And
this was more than a sale of
assets. CEF is a going concern
and we were hoping for a
premium price,' continues
Thum. 'What we had to be
able to show was that, for the
right company, this acquisition
would be worth a premium
because of the growth
potential and synergies with
the buyer's existing business.
We took special care to make
the formal sales memorandum,
which was prepared jointly
with DLL, very clear and well
presented, which ultimately
contributed to the smooth
progress of the auction.'
The company that won out in
the end was the US-based
Associates First Capital
Corporation (AFCC).
Formerly known as FoMoCo,
the vehicle finance arm of the
Ford Motor Company, it is the
largest non-bank financial
institution in America with a
USD 25 billion market
capitalization. 'It was at this
point that the teamwork really
started,' explains Judith
Hamilton. 'CEF, as a DLL
subsidiary had certain banking
arrangements in place in
London to support their loan
portfolio. Associates requested
that the business be sold with
these arrangements in place.'
This seemed a simple exercise
at first. However, in support of
the existing CEF facility, the
Bank had a group of internal
swap arrangements in place to
match the funding
requirements of the business. It
London's Nicolas
Thum
Rabo Espana has taken a
leading role in facilitating a
broad-ranging strategic
transformation at Ebro
Agricolas, Spain's leading
domestically-owned food and
agribusiness company. Active
primarily in beet sugar -
indeed the leading sugar
producer in Spain - Ebro has
for some years been
diversifying into rice, cannery,
and spice activities. Now, it is
set to absorb its primary
domestic rival, Sociedad
General Azucarera (SGA), in a
move with important
consequences both on the
domestic and Furopean
agribusiness scene.
LEAD MANAGING
As part of its continuing
support for Ebro, a ESP 14
billion syndicated loan was
lead managed by Rabo Espana
together with Bank of
America. We were chosen in
part because of our success in
structuring an earlier March
1995 transaction under which
credit was extended against
reserve stocks of sugar. 'The
original deal was quite
innovative in the Spanish
context and it helped Ebro
with a very specific need,'
explains Arnout van Schelven,
general manager of Rabo
E,spana in Madrid. 'This
definitely gave us a foot in the
door when it came to
arranging the second
transaction.' It also solidified
our relationship with an
important cliënt. After the
merger, which will be
formalized this spring, Ebro
will be Spain's dominant
agribusiness company. It will
have a 75 percent share of the
sugar market, and will rank
number five on the European
league chart.
GREEN LIGHT
Meanwhile, its rice company is
already a top player in the EU.
'In the Spanish press, there has
been rnuch publicity about the
Arnout van Schelven leading the
Spanish team's sweet success
