Uneven is probably the best way of describing the year 2000 for Manchester’s corporate village.
The prediction that the trend for big public to privates (P2Ps) would be a passing fad looked convincing at the start of the year, with most leading firms reporting a full order book of varied work. It was not to be. The take-privates proved to be the dominant theme of the year with P2Ps putting significant amounts of work to Manchester lawyers. The deals included Allied Textile, Joseph Holt, Limelight and Peter Black. Management buy-outs (MBOs) proved equally popular, among them CRP and the enormous management buy-ouy of Caradon’s plumbing division.
Such conditions were always going to benefit the elite corporate firms – Addleshaw Booth & Co, DLA and Eversheds. A quick scan of the big deals reveals the collective strength of these three firms, whereas in the past Addleshaws was untouchable. Not that Addleshaws has been giving its rivals an easy ride. Top client Airtours may not have been as lucrative as it was the previous year with its contested bid for First Choice, but the ever-acquisitive holiday group certainly kept Addleshaws busy.
Airtours aside, take-privates were a dominating feature last year with corporate partner Richard Lee clocking up six deals, culminating in the Peter Black marathon in November. Also impressive was DLA. Unsurprisingly, given the strength of its venture capital connections under corporate head Andrew Holt, the firm was active with debt and equity providers, despite suffering some bad luck on the deals that made it to the market.
Perhaps the most eye-catching performance came from the Eversheds corporate machine, which bagged a range of high-end corporate and banking work. With significant new instructions including Ultraframe and plenty of work coming from the Coates Viyella disposal programme, the days of disparagingly comparing Eversheds Manchester with its larger Leeds counterpart seem well and truly over.
One rung down, Hammond Suddards Edge and Halliwell Landau were both wrestling with a number of key changes. Hammonds in particular looked to be a team in flux, with Stephen Levy more active on projects than corporate finance and Patrick Jolly moving in-house with client SurfControl.
The firm will now be looking to relative newcomers such as Darren Warburton and Paul Ellaby to make their mark. There is little doubt Hammonds needs a little more mass if the corporate team is to fulfil its earlier promise. On the plus side, office head William Downs is still a business winner, as shown by the Manchester office’s successful pitch to advise BNFL. The firm also turned up on enough significant deals – CRP and the £84m financing by JR Crompton among them – to make its presence felt.
Halliwells also struggled with personnel changes. The departure of Tim Jackson Smith, who had done much to raise the firm’s profile for tech-related financing work, to client Knowledge Management Systems left the firm looking light in a key market. Nevertheless, the firm maintained a conveyor belt of public offering work on Ofex and AIM and its finance practice under John Whatnall racked up some notable successes.
Elsewhere, teams at Chaffe Street, Kuit Steinart Levy, Cobbetts and Pannone & Partners all turned up on notable deals. Looking forward, most firms have reported a slow January and February, not that encouraging in what is supposed to be the business-end of the financial year, but current conditions suggest 2001 will provide a solid if unspectacular year.
With plenty of private equity sloshing around and the same unimpressive mid-cap valuations for north-west plcs, the stream of P2Ps shows no sign of slowing. Debt providers, however, are looking a little more cautious.
12 months in corporate Manchester: stand-out deals
Caradon buy-out: October 2000
A benchmark deal for the northwest and the largest regionally led MBO of 2000. The deal saw HSBC Private Equity’s Manchester office acquiring Caradon’s plumbing division in a deal valued at £442m.
There were bigger London-driven deals, but this gave regional advisers a rare chance to clean up on a £200m-plus acquisition. The loudest celebration came from Eversheds, which was instructed over HSBC’s favoured adviser, DLA, on the basis of a related previous instruction. However, with JP Morgan providing the debt from London, US firm Shearman & Sterling picked up the banking honours.
Understandably, DLA was gutted, while the roll call of Eversheds’ top billers – Edward Pysden, Daniel Hall, Nigel Dale – employed in a 50-lawyer team gives a pretty clear indication of why the national giant’s Manchester office is fast outpacing its larger Leeds counterpart.
Peter Black public to private: November 2000
The other major buy-out to hit the northwest. Valued at £230m, the take-private of the household products group was 3i’s largest deal of the year and provided a more even spread of work to the region’s top lawyers than Caradon.
With PricewaterhouseCoopers Manchester doing the early running, the deal was always going to have a trans-Pennine flavour, although much of the legal work was run from Leeds.
The instruction nevertheless gave Manchester a chance to leverage off its strong pool of private equity lawyers.
Eversheds advised the management team and split its team between Leeds and Manchester, with the increasingly visible corporate partner Rob Pitcher leading the operation from Leeds and national head of private equity Peter Halpin overseeing the Manchester team.
Likewise, 3i favourite Addleshaws left the Manchester-based Richard Lee, fresh from the Joseph Holt and Allied Textile deals, to co-ordinate the firm’s effort.
Royal Bank of Scotland brought in DLA to advise the three-bank syndicate backing the deal.
With an enormous management group to advise, complex banking provisions, and an absence of City firms in view, this was the deal that the region’s professionals will want to top this year.
