Transcript Zeus Private Equity - Recruitment International

Private Equity and Recruitment
Gary Tipper, Palatine Private Equity
Ian Langley, Air Energi Group
Palatine Private Equity
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Independent private equity house, owned and controlled by the Partners
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Entrepreneurial team with over 50 years private equity experience
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£100m maiden fund raised in 2007 fully invested in nine deals
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£150m second Fund now raised and being invested
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Equity investments from £10m to £25m
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Offices in Manchester, London and Bristol
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All deals led by the decision makers
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What is Private Equity ?
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Medium to long term funding in return for an equity stake in
a business
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There are a lot of different private equity firms
◦ Different fund sizes
◦ Different types of deals
◦ Different returns expectations
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Typically private equity investors look at an investment
period of 3 to 5 years
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A shareholder relationship not just a source of funding
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What can private equity funding do ?
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Management buyouts
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Shareholder restructurings
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Cash out / equity release
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Fund acquisitions / buy and build strategy
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Growth capital
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Why recruitment / staffing ?
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Ability to dominate a sector and/or functional niche
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Control of scarce resource
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Potential for rapid organic growth
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Drive scale
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Sector and sub sector consolidation, acquisitions, buy and builds
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International expansion
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Low capex requirements
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Air Energi Group
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AEG provides expertise to the energy industries. This includes
contract, project and staff hire teams and individual engineers
and technical persons together with full global compliance and
logistical support services.
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AEG places around 2,500 consultants/contractors on both
upstream and downstream energy projects
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Palatine backed the management buyout in August 2009
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Ian Langley, Chairman, led the deal
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Provided an exit for some legacy shareholders
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Enables other legacy share holders to realise some value from
the business
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Air Energi Group – Post Deal
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Appointed a independent Non Executive Director
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Completed two acquisitions – PMG and Indonesia
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Refinanced with HSBC $50M global facility
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Broadened the global operating network – 25 offices
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Grew profitability to more than £1-m at exti from £5m at entry
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Completed a secondary buyout with LGV in October 2012
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An overall return of 3x cash in just over 3 years for PE and
Legacy Shareholders
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New Management shareholders saw a 10x+ return
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What do we look for ?
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Quality management team, strength in depth
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Well thought through and deliverable business plan
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Businesses operating in a niche (functional or sector)
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Scalable business
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Good margins
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Strong pipeline, good visibility of earnings
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Be prepared
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Get your business in good shape for a transaction
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Legal, compliance, paperwork in order
◦ Banking
◦ Insurance
◦ Contracts
◦ Tax
◦ All jurisdictions
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Financials
◦ P&L
◦ Balance Sheet
◦ Ebitda
◦ Margins
◦ Cashflows
◦ Cost structure
◦ Geographies
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Be prepared
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Get good advisors
◦ Corporate Finance Advisor (someone who understands your sector)
◦ Accountant / Tax / Audit
◦ Lawyer
◦ People that you trust
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Due diligence
◦ Financial
◦ Legal
◦ Management assessment
◦ Commercial/market

Deals and due diligence takes time
◦ Meetings
◦ Management time / long hours
◦ There will be bumps along the way
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Be prepared
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Do your own due diligence on potential funders
◦ Speak to management teams they have backed
◦ Speak to other advisors that have worked with them
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Choosing the right funder is crucial
◦ You’re going to work together for 3-5 years
◦ Chemistry needs to work
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Summary
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Private equity can be a good source of funding to accelerate growth
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It is not something to be rushed into, consider properly and assess your options
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Have a deliverable business plan
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Be clear about what the funding is for and how it will be used
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Be prepared, have the business ready
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Do your own homework on potential funders
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Gary Tipper
Managing Partner
Ian Langley
Chairman
0161 214 4730
[email protected]
[email protected]
0870 112 9444