Electric Business

A brief summary of business news to keep you informed on company start-ups, corporate downsizing and mergers and acquisitions.

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Evolve IP acquires thevoicefactory

US business Evolve IP has bought thevoicefactory, a cloud communications provider based in Cardiff. The acquisition provides Evolve IP with additional distribution channels in the UK and Europe, as well as an expanded client base and penetration into the hospitality, automotive, finance and legal sectors. Founded in 2009, thevoicefactory’s services include web-based call management, an advanced omnichannel contact center, single-sign-on identity and access management and a worldwide team of custom application developers. The business has more than 65,000 users in 21 countries via its private label program.

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Ellis Short exits with Sunderland relegation

Irish-American businessman Ellis Short has agreed to sell Sunderland AFC to an international consortium of football investors, led by Eastleigh FC chairman Stewart Donald. The news comes with confirmation of the club’s relegation from the Championship and the sacking of manager Chris Coleman. The exit of Short ends a decade with the club, predominantly spent in the Premier League until relegation in 2017. Upon leaving Short has cleared Sunderland’s debts, believed to be worth over £100m accrued over the course of his tenure.

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Asda and Sainsbury’s propose supermarket sweep

Asda Group and J Sainsbury plc have announced plans to merge their businesses. The deal would create one of the UK’s largest grocery, general merchandise and clothing retail groups, with revenues of around £51bn for 2017 and a workforce of 330,000 people. The combined company would have a network of over 2,800 Sainsbury’s, Asda and Argos stores and several of the UK’s most visited retail websites, amounting altogether to 47 million customer transactions each week. This new entity would receive nearly £1 in every £3 spent on groceries nationwide, beating even Tesco by market share. The firms suggest that the merger will allow the enlarged company to invest in areas that matter most to customers, such as price, quality, range and more flexible ways to shop. With this expanded purchasing power the business expects to be able to lower prices on many items by around 10%. The business will be chaired by Sainsbury’s Chairman and led by Sainsbury’s CEO and CFO. Asda will continue to be run from Leeds with its own CEO, who will join the group operating board along with two representatives from Walmart. Walmart would hold a 42% stake in the combined company.

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LDC backs Precision Micro MBO

Precision Micro has been spun out from Meggitt, shortly following the engineering group’s entry into the FTSE 250. Mid-market private equity investor LDC has injected £13m into Precision Micro in support of a £22.5m management buyout led by managing director Ian McMurray. Precision Micro is a photo-chemical etching company with offices in Erdington, Birmingham as well as Germany and the Netherlands. The company manufactures more than 50 million high-precision metal components for global customers each year, with around 75% of sales coming from overseas.

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Acceleris steals the Limelight

Harrogate-headquartered communications agency Acceleris has completed a deal for London and Dubai-based PR firm Limelight. The acquisition propels Acceleris to the top 20 of UK agencies with a HQ outside of London. Limelight has a team of 25 professionals, including former print and broadcast journalists and social, video and content specialists. The agency will retain its name and offices.

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Sky Betting & Gaming acquired in £2.5bn deal

Canadian gambling giant Stars Group, the owner of PokerStars, has agreed to take over Sky Betting & Gaming (SBG) from CVC Capital Partners and Sky. The £2.5bn ($4.7bn) deal will create the world’s largest publicly listed online gaming company. SBG controls one of the world’s fastest growing sportsbooks and is one of the UK’s leading gaming providers. The business boasts the UK’s largest active online player base and is a leader in mobile betting and gaming with over 80% of its revenues coming from mobile devices. The group’s turnover was £624m and unaudited adjusted EBITDA £202m in the last calendar year, representing growth of 46% and 51% respectively over the previous two years. SBG’s Yorkshire base will become a key hub for the enlarged group.

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Waterstones sold to Elliott Advisors

Private equity firm Elliott Advisors has bought a majority stake in Waterstones. Current CEO James Daunt will continue to steward the company he has led since 2011, when HMV Group sold the chain to Alexander Mamut. Mamut’s Lynwood Investments will retain a minority stake with this deal, although exact terms have not been disclosed. Waterstones has 283 stores and employs 3,000 people across the UK, Ireland, Belgium and the Netherlands. Under Lynwood in 2016, the bookshop chain returned to profitability for the first time in five years. Its new owner, Elliott Advisors, is an activist investor, which also intervened in the British high street last week with the purchase of a 6% stake in Whitbread to nudge the company into a demerger of Costa Coffee. The firm’s plans for Waterstones have not been disclosed.

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Whitbread to spin off Costa Coffee

Whitbread has revealed that it plans to demerge Costa Coffee from the wider group over the next 24 months. The announcement puts a timescale to existing plans to allow Costa and Premier Inn to operate as ‘distinct, focused and market-leading businesses.’ In the last three years Whitbread has laid the foundations for international growth with acquisitions for Premier Inn in Germany and Costa in China. Costa Coffee is the top coffee chain in the UK and second largest globally, with 2,400 shops in the UK and over 1,400 abroad.

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Rutland exits as Pizza Hut completes MBO

Rutland Partners has sold Pizza Hut Restaurants UK to its management team, led by CEO Jens Hofma. The reported £100m exit concludes a five-and-a-half year stint for Rutland, which bought the chain from Yum! Restaurants for a nominal £1 in 2012. Pizza Hut’s 260 UK restaurants have since undergone a £60m American-inspired re-imaging as the private equity firm sought to change the fortunes of the then loss-making business. The new owners will receive financial support from Pricoa Capital and Rutland will also retain an investment in the firm.

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NorthEdge Capital backs Prohire MBO

NorthEdge Capital has backed Prohire MD Dave Barlow in a management buyout. The Stoke-headquartered fleet management business employs 70 people and turned over £40m in the most recent financial year. Investment will be used to expand Prohire’s sales function and develop its ProVision technology platform. NorthEdge will also support the pursuit of a buy-and-build strategy.

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