The Rank Group
Culture shift
The Client
The Deal
Parker endorses that: "We're not talking about rocket science,
here. Essentially, it's about encouraging people to work
together, and Acquisition Finance have already seen some
terrific examples of cooperation with, for example, both the
Loan Products Group and Mergers and Acquisitions (M&A).
These can then be highlighted as successes, and it's an
excellent way to say to the entire organisation 'Okay, if we do
these things properly we can work more effkiently together,
and the whole really does then become more than the sum
of its parts'."
This unified and cohesive approach is one of the main reasons
that American investment banks have had success in the
past. By presenting clients with a large, integrated team, they
cement the one-bank image and reinforce the feeling of
offering up an integrated approach.
Cuppen recognises this business approach, but believes
Rabobank is too sophisticated to get caught in the trap of
imagining that large teams equal happy clients. 'The people
we deal with are very, very savvy customers, and they can
spot instantly if your team isn't working together. I think the
reason Rabobank never adopted the American-style approach
is simple: we're a completely different organisation from the
investment banks. Our revenue model is very different and
leans more on putting our capital to work.
"In the past we haven't worked intensively together as we are
doing now because there was no real need. We had sufficiënt
capital, everyone had their own clients, and there was a deep
enough market for everyone to be successful without having to
interact. Now, of course, the market has changed dramatically.
There is far less capital available, liquidity is scarce and good
people are difficult to come by. Which is why we're now
investing in knowledge, and combining resources in a lean
and mean way. We want to use our entire resource base in the
best way possible, and use it repeatedly so that it becomes
streamlined, efficiënt, and increases our earnings. And to
make this work means that you need to communicate and
cooperate."
The Rank Group, a privately owned, New Zealand-based
group and a Rabobank customer for over 10 years, is a good
example of how Acquisition Finance is involved in transac-
tions without a financial sponsor and is trying to drive value
'across both the silos and the regions'. Rabobank supports
Rank's diverse operations, which range from timber products
to food packaging, with lending relationships in Australia,
New Zealand and Germany. Although the relationship origi-
nated in Sydney, business dealings have now spread to
three continents.
Rank recently acquired Pactiv, a specialised food packaging
business in the US, through Reynolds Packaging, one of
Rank's major subsidiaries. As a core bank, Rabobank was
invited to support the transaction with a USD 250 million
underwriting commitment, as well as a significant final hold.
The Acquisition Finance team in New York originated the
transaction, and then introduced GFM Syndications to Rank.
Once the credit analysis was prepared - which makes sure all
the risks are fully understood - GFM assessed the market risk
and obtained approval to proceed with the underwriting.
The transaction proved a great success in the market and
resulted in fees of over USD 5 million being booked. In addition
to the success of the acquisition transaction, GFM saw an
opportunity to suggest a securitisation structure to partially
reduce the group's cost of borrowing. The GFM team recently
mandated to undertake an initial USD 500 million securitisation
for Reynolds. The deal proved to be an effective blend of event-
driven finance, specialised products, and good old-fashioned
relationship management, with Rabobank using specialists
in five offices on three continents to deliver a successful out-
come.
ISSUE 26 JANUARY
RI WORLD
