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Latest business news:
According to new research from the Institute of Economic Affairs, the cost of tax collection in the UK now amounts to nearly £20bn a year, including both compliance and administration costs. The right wing think tank claims that the impact of taxation on small businesses is “particularly devastating” and its director, Mark Littlewood, says that “Merely complying with tax laws is an enormous burden on British business. Not only do we need to slash tax, we need to simplify it to allow enterprise to thrive."
The UK division of Reader’s Digest has gone into administration following the breakdown of talks with regulators on how the company would fund a £125m pension deficit. The administrators hope to sell the business.
Barclays Bank has announced profits before tax of £11.6bn for 2009. It is the first of the large banks to reveal its financial performance for the last year, and the decision of its chief executive and president, John Varley and Bob Diamond, to forego their bonuses will put pressure on the heads of rival banks to do the same, particularly those whose companies were bailed out by the taxpayer. Barclays’ figures include £6.3bn for the sale of Barclays Global Investors, and its star performer was its investment banking division, Barclays Capital, with profits rising by 89% to £2.4bn.
Diageo and Unilever have warned the government that they are prepared to move their headquarters out of the UK if personal and corporation taxes are increased over the coming years. Diageo’s chief executive Paul Walsh says “The UK has become progressively a less attractive location to base oneself in”.
Kraft has reneged on its pledge to keep open the Cadbury factory and save 400 jobs at Somerdale, near Bristol. During its bid to buy the British chocolate firm, the US company said that it would be in a position to reverse Cadbury’s decision to close the site, but Kraft now says that as the closure plans were “so far advanced” it would be “unrealistic” to alter them.
The uncertain economic outlook has led to the postponement of three stockmarket flotations worth billions of pounds. The private equity-owned clothing retailer New Look, Merlin Entertainments, the owner of the London Eye and Legoland, and Travelport, which provides transaction processing services to the global travel industry, were all hoping to float on the London Stock Exchange in the coming weeks, and the cancellation of their plans reflects the lack of appetite for risk among investors in the current financial climate.
EMI Group says that it suffered a loss of £1.6bn last year, largely due to write-offs and interest on its vast debt. The British music group was bought by Terra Firma for £4.2bn in 2007, and Guy Hands’ private equity firm is being forced to sell assets such as the world famous Abbey Road studios, and to ask its investors for an additional £120m to save EMI from breaching its loan covenants and being taken over by its bank, Citigroup. If EMI does fall into the hands of its bankers, it is likely to result in yet another takeover approach by its US rival, Universal Music.
Apple has announced its latest device, the iPad, which it hopes will compete against netbooks in the marketplace between mobile smartphones and laptops. The iPad, which will be available for sale in late March, allows users to browse the internet, read and send email and watch video. In addition it reads e-books, where it will be going up against specialist readers such as Amazon’s Kindle.
Business recovery service Vantis has compiled a document detailing the finances of Premier League strugglers Portsmouth FC. The report includes details of the club’s debts and gate receipts, and will be presented to the High Court by the club ahead of a winding-up petition from HMRC on 1 March.
Shop Direct, the owner of the Littlewoods and Woolworths brands, is to close its call centres in Sunderland, Burnley and Newtown, with the loss of up to 1,500 jobs.
The value clothing retailer Ethel Austin and its sister company the homewares chain Au Naturale have gone into administration. The administrators say that in the current economic climate there is no guarantee that buyers will be found for the businesses and that they are “unable to rule out store closures and redundancies”. There are around 300 Ethel Austin outlets in the UK. The global financial crisis has hit the retail sector particularly hard and the adverse weather conditions in early 2010 have exacerbated the situation.
Toyota Motor Europe is to recall up to 1.8 million of its vehicles to solve “a potential accelerator pedal issue”. The affected vehicles include the Auris, Avensis, Corolla, iQ, Verso and Yaris models, and 180,865 of them are in the UK. The global recall will cost the Japanese carmaker billions of dollars and its share price fell by more than 10% following the announcement. Miguel Fonseca, managing director of Toyota GB, said “At Toyota, we’ve built our reputation on quality, durability and reliability and most importantly trust. We want to rebuild that trust with our customers by effectively working through this issue.” The news came just days after the company announced that it was cutting up to 750 jobs in the UK.
Crystal Palace Football Club has gone into administration.
Adams Childrenswear has gone into administration for the second time in as many years. The administrators hope to sell the 75-year-old retail clothing business as a going concern. Adams, which is also known as JS Childrenswear Ltd, has more than 100 stores in the UK, and a further 19 concessions in the UK and Eire, and employs over 1,100 people.
Google has won the rights to broadcast live coverage of the Indian Premier League (IPL), in a landmark deal which will see all 60 games streamed online around the world on YouTube. The IPL, established in 2008 and based on the popular 20-over form of the sport, sees the world’s best players, such as Andrew Flintoff and Kevin Pietersen, auctioned off to the highest bidding city-based team.
E-Clear, the company that processed the online ticket sales of the collapsed travel firm Globespan, has itself been forced into administration by the High Court. The legal action was brought by Globespan’s administrators, PriceWaterhouseCoopers. E-Clear is believed to owe around £35m to Globespan and it is reported that the Serious Fraud Office is now looking into the activities of the credit card processing company.
Royal Mail is to increase the price of standard first and second class stamps by 2p, to 41p and 32p respectively, from 6 April 2010. However the prices for ordinary meter and account business mail will remain at 36p and 25p for standard letters weighing up to 100g. Royal Mail points out that UK stamp prices are among the lowest in Europe, with the average cost of sending a 100g item by first class post or equivalent across the continent now standing at 82p.
The proposed merger between Ticketmaster and Live Nation has been given the go-ahead by the Competition Commission. Critics had voiced concerns that the merger of the event promoter and the ticket seller would result in the combined entity monopolising the market for live music, with a detrimental effect on ticket prices. The merger is yet to be approved in the US, where it has met with vociferous opposition, most notably from Bruce Springsteen.
Latest company mergers and acquisitions:
The management team of Synseal Extrusions, a manufacturer of windows and conservatories, has acquired the company in a management buy-out backed by HIG Capital.
Hamilton Bradshaw, the private equity firm owned by the Dragons Den businessman James Caan, has acquired a 90% share in DRC Group, which provides locum services and temporary staffing for the NHS.
Deb Group, the company responsible for the Swarfega industrial hygiene brand, has been acquired in a management buy-out backed by Charterhouse Capital.
The private equity firm Bridgepoint is to acquire Care UK, the health and social care provider, for £281m.
The retail chain Pavers Shoes has acquired the online store Shoe-shop.com allowing the company to offer a multi-channel service. Shoe-shop.com was established in 1999 by Stuart Paver, son of the founder of Pavers Shoes, Catherine Paver.
The private equity house Endless, in partnership with HSBC, has acquired the schoolwear supplier Trutex.
Fishawack Communications, a UK-based medical communications agency, has expanded in the US with the acquisition of Nexus Communications. The deal was backed by the investment firm YFM Group.
Baxter Healthcare has acquired the UK-based medical technology company ApaTech for up to $330m.
Advanced Computer Software has acquired Cerrus, a provider of software to the community health and social care sectors.
Sovereign Capital has backed a management buy-out of the drain and sewer services specialist Euro Environmental Group.
Access Intelligence has acquired Cobent, a provider of learning management systems and compliance training software, for £5.2m.
Avacta Group, a provider of analytical technology to the drug development and diagnostics sectors, has acquired ReactivLab. The company specialises in veterinary diagnostic services and will become part of the Avacta Animal Health division.
Deloitte has expanded its environmental consulting practice with the acquisition of dcarbon8, a consultancy that helps businesses to achieve responsible carbon management and sustainability.
The payment service provider PayPoint is to acquire Verrus, the company that pioneered mobile phone payment systems used by parking authorities, for up to £29m.
Straight, a supplier of recycling containers, has acquired the UK division of the Greek firm Helesi for £1.65m. Straight will hold the manufacturing and distribution rights for Helesi products in the UK, which will be jointly branded.
The construction materials group Michelmersh Brick Holdings has acquired Freshfield Lane Brickworks.
K3, a supplier of supply chain software to the retail, distribution and manufacturing markets, has expanded its business in the UK and Europe. It has purchased the managed IT services company DigiMIS for up to £1.3m, and Pebblestone Netherlands, a provider of enterprise resource planning solutions for the fashion industry, for £1.26m. Pebblestone will become part of K3 Nederland, K3’s Dutch retail solutions business.
The British industrial steel engineer Delta has been acquired by the US company Valmont Industries.
The insurance company MetLife is to acquire American Life Insurance Company, an international subsidiary of AIG, for $15.5 billion. The purchase will significantly boost MetLife’s market position in Japan, Europe, the Middle East and Latin America.
Byotrol, a company that develops advanced anti-microbial products, has acquired ByoFresh, a supplier of pet grooming and hygiene products. ByoFresh has already been using the Byotrol technology in its products for several years.
The support services provider Europa has enhanced its facilities management capabilities with the acquisition of Integrated Building Services Engineering Consultants. The company, which trades as Operon, had previously entered administration, and its team will now become part of Europa.
The digital brand agency LBi has merged with the search marketing company bigmouthmedia. LBi foresees that the deal will create the largest digital agency in Europe able to offer integrated online marketing, consulting and technology services.
The Chesham Building Society is to merge with Skipton Building Society. The Chesham’s branches will be renamed but will remain open, and members will have access to Skipton’s numerous branches and customer services.
The investment firm Lion Capital has sold the UK and US operations of Kettle Foods to the US snack foods company Diamond Foods for $615m.
Li & Fung, the Hong Kong-based consumer goods supply chain management company, is to acquire the UK-based clothing design and distribution business Visage for £173m, in an effort to expand within Europe.
Zerographic Systems has acquired the document printing and presentation company Murodigital, which will continue to operate under its existing name.
JF Hillebrand, a provider of wine and beverage logistics services, has acquired ABV Logistics. Both companies hope to benefit from a wider customer base. In particular, ABV has a strong presence in Iberia and Italy.
equityCare, a specialist in financial and legal advice for the care home sector, has merged with Paying For Care At Home, the domiciliary care subsidiary of Better Retirement. The organisation will operate under the equityCare brand.
A majority stake in the London-based computer games developer Rocksteady Studios has been acquired by Warner Bros Home Entertainment Group. The acquisition follows Rocksteady’s success with the critically acclaimed game Batman: Arkham Asylum in 2009, a key franchise brand for Warner Bros.
Ideal Shopping Direct, the television and internet home shopping company, has acquired the online retailer Lead The Good Life.
Excelsyn, a pharmaceutical services company based in North Wales, has been acquired by the US firm AMRI.
3i Group has sold its controlling stake in the Nordic healthcare provider Ambea to the buyout firm Triton, for around €850m.
Through its subsidiary Centrica Resources, Centrica is to acquire certain gas assets of Suncor Energy for £246m. The assets in question are based in Trinidad and Tobago and provide the company with its first liquefied natural gas position.
Rolls-Royce is to buy the remaining 67% stake in the Norwegian marine technology company ODIM ASA that it does not already own.
A 70% stake in the online insurance company esure will be sold by Lloyds Banking Group. Peter Wood, a founder of the esure business, will lead a management buy-out through the newly formed company esure Group Holdings.
Following the announcement that the company had entered administration, London Town, a pub group with around 350 sites in the UK, has been acquired by its management team.
SLR, the environmental consultancy, has acquired the Australian company Heggies. It is SLR’s first acquisition in this region. The company has also acquired the specialist ecological consultancy Andrew McCarthy Associates.
United Business Media has acquired the banner advertising platform Game Advertising Online, through its subsidiary UBM TechWeb, for up to $8m. TechWeb specialises in business technology solutions for technology professionals, and hopes that this acquisition will expand its client base within the games industry.
Through its European division Wyndham Exchange & Rentals, the US hospitality group Wyndham Worldwide is to acquire the UK holiday firm Hoseasons Holdings for approximately $60m.
Handicare, a Norwegian-based group of companies specialising in mobility products, has acquired the UK stairlift manufacturer Minivator.
Halfords has acquired Nationwide Autocentres, the car servicing and repair company, for £73.2m. Halfords, which already holds a leading retail position in car maintenance, hopes to add 200 new outlets to Nationwide’s 224 existing sites, and rebrand the company as Halfords Autocentres.
Affiliated Managers Group has purchased two UK-based businesses, Pantheon Investments and Artemis Investment Management.
Advanced Computer Software, a provider of IT services to the primary care sector, has acquired Redac Holdings for £100m. Redac owns COA Solutions, which specialises in business management and information systems for service sector organisations.
Astaire Securities, the institutional investment firm, is to acquire the stockbroker Hoodless Brennan for £3.6m.
Alliance Pharma is to acquire Cambridge Laboratories, a pharmaceutical distribution and development company, for up to £16.4m. Alliance will gain 18 prescription brands to add to its portfolio of established niche products.
RSA Insurance Group has acquired the Oman-based Al Ahlia Insurance Company for £31m. RSA’s emerging markets platform in the region will benefit from the acquisition and Al Ahlia will become the largest insurance group in Oman.
Barclays Bank is to increase its European presence with the acquisition of the Italian credit card division of Citibank International Bank, which consists of 197,000 credit card accounts. Eventually the business will become part of Barclays Italy and the cards will be rebranded under Barclaycard.
A group of private equity firms has entered into an agreement to acquire the software-as-a-service e-learning solutions provider SkillSoft. Berkshire Partners, Advent International Corporation and Bain Capital Partners will pay around $1.1 billion for the business.
Robotic Technology Systems, a specialist in automation systems for life sciences and industrial processes, has acquired a 65% share in the US-based scientific instrument manufacturer Hatch Science.
The online gaming software supplier Playtech has acquired Virtue Fusion, a bingo software company, for up to £36m. As a result of the acquisition, Playtech will have a market leading position in online bingo as well as poker and casino.
Asterand, a specialist in human tissue research, has acquired the US-based research company BioSeek.
The veterinary service provider CVS Group is to acquire Veterinary Enterprises & Trading, the holding company of several veterinary surgeries and a laboratory in the South East of England.
The property and infrastructure consultancy Capita Symonds has acquired NB Real Estate, a commercial property management company, for £10m. It will continue to trade under its existing name.
Guinness World Records moves to expand its online presence with the acquisition of the social networking site Bragster.com, which allows visitors to upload videos of dares and challenges. Guinness has plans to create a new version of the site that will allow users to share record attempts through an online community.
Daisy Group has acquired the IP telecoms carrier and telephony reseller BNS Telecom Group.
The television and radio production company Above The Title has been acquired by UBC Media Group, a provider of services to the radio industry.
First Artist Management has been acquired by the talent management agency James Grant Media as it establishes a new division to represent the factual and specialist, sports media and news broadcast genres.
The corporate advisory and stockbroking firm Daniel Stewart Securities has expanded its global presence with the acquisition of the financial consultancy MENA-RL, which operates throughout Europe, Africa and the six Gulf Co-operation Council member states.
AXA Private Equity has sold a 65.5% stake in Spotless Group, a French manufacturer of household products, to the private equity firm BC Partners.
In preparation for launching its new division TSG Enterprise Solutions, the IT company Technology Services Group has acquired the consultancy Croft Technology.
The Latin American chemical production company Mexichem is to buy INEOS Fluor, the fluorochemicals division of the INEOS Group.
European Nickel is to merge with the Australian company Rusina Mining. The combined group is predicted to produce around 45,000 tonnes of nickel a year through it projects in Turkey and the Philippines.
The private equity firm Bridgepoint has acquired LGC, a laboratory services specialist, for £257m.
Portugal’s Banco Espirito Santo de Investimento has acquired a 50.1% stake in the UK-based investment banking group Executive Noble. The combined group will have nearly 1000 offices worldwide and the opportunity to provide investment banking services in new markets such as Brazil and India.
Trinity Mirror is to acquire GMG Regional Media, the local media division of the Guardian Media Group, for £44.8m. The division is currently responsible for 32 regional publications in the north west and south of England, including the Manchester Evening News and the Reading Post. The deal does not include Channel M, a TV station in Manchester, or the local newspapers in Woking.
Adventis Group is to acquire bChannels, the technology and telecoms marketing company. bChannels will work alongside the group’s existing marketing agency Second2.
The newly formed private equity firm Better Capital has acquired Gardner Aerospace, a supplier of metallic components to the aerospace industry.
Swindon-based AML, a company that manufactures armour and security products, has been acquired by TenCate. AML’s activities, particularly within vehicle armour production, will complement and expand TenCate’s offering in the UK and throughout Europe.
The BSS Group, a distribution company supplying specialist trades, has acquired the builders merchant UGS for £5.1m.
The insurance group Amlin has acquired the insolvency insurance business of Lockton. The company will trade as AUA Insolvency Risk Services, an FSA-registered broker.
The customer insight consultancy dunnhumby has acquired KSS Retail, a provider of price modelling and optimisation software for retailers. dunnhumby works with leading retailers such as Tesco.
The GCI Telecom Group, which trades as Edge Telecom, has acquired the electronic communications company Invomo, bringing inbound telephony and network expertise to the group.
The investment firm YFM has backed a management buy-in worth £3.5m at Deep-Secure, a provider of communication solutions for military, defence and intelligence organisations.
Balfour Beatty has acquired Multibuild Hotels & Leisure and Multibuild Interiors for £1.9m. The companies, which were originally a subsidiary of Multibuild Holdings, provide construction and fit-out services.
Klarius, the car parts manufacturer, has acquired Quinton Hazell Automotive, thereby widening its product offering and global network. Quinton Hazell was previously owned by the US firm Affinia.
In its fortieth acquisition in six years, Chess Telecom has acquired the business telecommunications company Pennycom.
Callprint Group has acquired Redwood Press, a Liverpool-based printing and creative solutions company that had entered administration.
The UK subsidiary of the Finnish food group Raisio is to purchase the snack foods company Glisten.
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More business news
Corus is to mothball part of its Teesside plant with the loss of 1,700 jobs. The steelmaker blames the decision on the loss of a major contract and accuses four international customers of reneging on a ten-year deal that was signed in 2004. The chief executive of Corus, Kirby Adams, said “We are acutely aware that this will be devastating news for our employees, our contractors, their families and the local community…This is the last thing we wanted and we feel deeply about what is happening. Sadly, it has become unavoidable, through no fault of our people on Teesside”.
The US internet giants Google, Facebook, eBay and Yahoo have written to the business secretary Peter Mandelson, urging him to remove a clause on copyright from the government’s new Digital Economy Bill. The clause gives any future secretary of state the power to amend the Copyright, Design and Patent Act, and the companies claim that this could discourage innovation and impose unnecessary costs on companies that develop new technologies in the future. The government says that the clause is necessary to combat copyright theft.
Blacks Leisure has avoided administration by coming to a company voluntary agreement with the landlords of its shops. The operator of the Milletts and Blacks outdoor clothing stores will now implement a turnaround strategy which will see the closure of around 90 outlets and the refurbishment of the remainder.
Mothercare is to open a further 31 of its successful out-of-town parenting centres over the next three years. The mother and baby goods retailer says that 65% of its UK stores profit comes from outlets of this type. The company has also identified 90 less profitable high street stores on which the lease expires within the next three years, and it plans to either move these to out-of-town locations, renegotiate rental terms or close the outlets altogether. In addition, Mothercare plans to open 12 in-town ‘landmark’ stores in high footfall sites, and it expects the changes to deliver a £10m increase in profits each year by 2012.