©Bloomberg A cautionary tale played out in the world of private equity last month when KKR disclosed a $300m writedown on the value of its biggest investment, which had been burning a hole in its portfolio for years. The buyout of First Data, a US payment company, had already drained $1bn from KKR’s balance sheet. The buyout group started to exit the deal last October, when it listed shares, but last quarter’s earnings included a $300m writedown, as stock market turbulence helped drag First Data’s shares down nearly a third since its listing. More On this topic IN Financials Big private equity groups including KKR and Blackstone have called this year’s market volatility a great opportunity to snap up companies on the cheap. But it also means stock investors are more cautious about companies floated by buyout houses. KKR’s First Data troubles are a reminder not just of heady valuations for large acquisitions near the top of the cycle, but also of prickly markets that can hurt the buyout groups with further mark-to-market losses once companies are floated. “There’s no lack of desire for taking companies public or selling them,” says David Fann, chief executive at TorreyCove Capital Partners, which advises PE investors. “The concern is whether they can get it done in a choppy market. I don’t think anybody has confidence they could get a sizeable deal done.” Risk aversion ruled at the start of the year, as global equity markets sold off and credit spreads widened. Initial public offerings all but dried up, including those from PE groups, as investors demanded bigger discounts to publicly traded peers. In an environment of risk aversion, many of 2015’s listings have not performed well. At the market trough in February, investors in last year’s IPOs had lost an average of nearly 30 per cent, according to Renaissance Capital, which runs IPO-focused exchange traded funds. “We had a very volatile market where the IPO market was just not healthy and anything with leverage was just that much more difficult,” says JD Moriarty, head of Americas equity capital markets at Bank of America Merrill Lynch. Since then the market has rebounded, making up nearly all the ground lost at the start of the year, and 2015’s IPOs have narrowed losses to 16.5 per cent on average. This year’s deals are up 17 per cent. The success of the recent IPOs such as American Renal Associates, which operates dialysis clinics, the first leveraged buyout since First Data, provides some optimism that the listings market is reopening. ARA has net debt of 4.2 times earnings before interest, tax, depreciation and amortisation. The company, which was bought by Centerbridge, is trading at $28 from a listing price of $22. With the equity rally stalled below last year’s high, investors remain cautious, however. Bankers are advising sponsors not to list their most indebted companies, according to a person with knowledge of the conversations. This year a handful of PE-related deals, including US Foods (owned by Clayton Dubilier & Rice and KKR), filed for IPOs. There is also a backlog, including the grocer Albertsons, carrying over from 2015. Among them SiteOne Landscape Supply, a distributor controlled by CDR, is expected to price its deal this week. Another issue for more leveraged IPOs is the mood in the credit markets. Bankers say investors become wary of deals when it looks like the companies could have trouble refinancing their debt. “It’s definitely picking up, but it will be gradual as we move into the second half,” says Frank Maturo, vice-chairman of equity capital markets for the Americas at UBS. “The jury is still out on leverage. It is becoming less of an issue partly because it appears interest rates are going to stay low for an extended period of time.” Copyright The Financial Times Limited 2016. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web. Source link

Birmingham local authorites are investing £1bn into regenerating parts of the city located around the planned High Speed 2 station in Curzon Street.  Source link

Book Course HSL is to run a 1 day course on COMAH Compliance for Lower Tier Establishments. 18 May 2016 The Control of Major Accident Hazards Regulations 2015 (COMAH) impose duties on establishments holding in storage or process quantities of hazardous materials above thresholds defined for each substance. Those establishments where the quantities exceed the lower of the thresholds are known as Lower Tier Establishments. This course identifies the COMAH duties for Lower Tier establishments and what needs to be done to comply with them. It also explains the duties that fall to the Competent Authority (CA) and Local Government. An introduction to the major hazards regulatory regime COMAH application, including the aggregation rules, duties and notification to the CA The Major Accident Prevention Policy, what it should and should not contain Understanding your risk profile Controlling your risks Roles and responsibilities for compliance Delivering the Safety Management System Mitigatory actions Managers/supervisors of new lower tier COMAH establishments, those moving into managerial roles at existing LT establishments and those wanting to refresh their understanding of COMAH. The course will be run at the Health & Safety Laboratory in the spa town of Buxton. Buxton is in the heart of the Peak District and has good links to mainline train stations and Manchester International Airport. Details of hotels in the Buxton area can be found at www.visitbuxton.co.uk. The cost of this course is £495 per person (includes course notes, lunch and refreshments). Book Course Please note the invoice option is not available within 4 weeks of the course date, or for overseas customers. For further dates and additional information email: training@hsl.gsi.gov.uk or contact the Training & Conferences Unit at HSL directly on +44 (0)1298 218806. Back to Health & Safety Training Courses Back to the top Source link

Its latest State of Trade Survey – the first since the EU vote – showed that sales of construction products increased in Q3. The results found that a net balance of 26 per cent of heavy-side firms reported a quarter-on-quarter rise in sales in Q3, while a balance of 50 per cent of light-side manufacturers also reported a quarterly sales increase. CPA senior economist Rebecca Larkin said: “In contrast to pre-referendum pessimism evident in manufacturers’ forward-looking views in last quarter’s survey, expectations for near-term sales turned markedly higher in Q3. “On balance, 45 per cent of heavy-side firms and 67 per cent of those on the light-side anticipated rising sales over the next three months and this optimism extends for performance over the next 12 months.” The Markit / CIPS Construction PMI data for September also showed growth in construction activity for the first time since the EU referendum. Results for September stood at 52.3, rising above the index’s 50.0 ‘no change’ mark and showed the biggest increase since March. However, the figure was still lower than the long-run average of 54.6. Source link