Our media releases

RMB wins Ernst & Young Mergers & Acquisitions Awards

Rand Merchant Bank (RMB) has won two more prestigious awards for mergers and acquisitions (M&A) activity. This morning, (31st March) RMB was awarded first place in the ‘Ernst & Young Review of Activity for the year 2008’ for M&A transactions advised on by value. It was also ranked first for acting as sponsor for the highest value of transactions (R94 billion).

RMB’s latest accolade comes as a result of it concluding deals worth R141,3-billion during 2008, according to Ernst & Young’s calculations, which exclude offshore transactions and transactions done by companies based offshore.

This award follows the five main awards it received from DealMakers magazine for M&A and corporate finance deals done in 2008. The two awards are the most prestigious awards made in the M&A sector.

• The disposal by Telkom of 15% of Vodacom to Vodafone. (R22,5-billion);
• The acquisition by MTN of Newshelf 664, a BEE vehicle (R24,4 -billion);
• Vodacom’s BEE transaction (R7,5-billion);
• The restructuring of the Aquarius Platinum shareholding structure (R6,3-billion); and
• The sale of Alstom to Actis (R5,2-billion).

Because the Ernst & Young survey excludes offshore companies, RMB’s largest deal of the year the Richemont/Remgro restructuring and the formation of investment company Reinet (R180-billion) was only included in the value of RMB’s transactions for the Remgro leg of this deal being R58,7-billion.

However, in the DealMakers magazine awards in February, this deal was voted Deal of the Year and resulted in Paul Roelofse, who was the RMB person leading this transaction, being voted individual Dealmaker of the Year, the first time this award was made. Roelofse was also team leader for the Alstom transaction which won the DealMakers Private Equity Deal of the Year.

“The Remgro/Richemont transaction was the largest transaction in the South African market during 2008 and involved complex restructuring in numerous jurisdictions,” says RMB’s head of corporate finance James Formby. “RMB was fortunate enough to advise both Richemont and Remgro.”

RMB also won the DealMakers award for M&A transactions by value for the fourth time in the last five years which, according to its calculations, amounted to R90,2-billion. RMB also received the award for general corporate finance transactions by value (R350-billion). The Remgro/Richemont transaction was included in general corporate finance, a category which covers unbundlings and share repurchases.

“Our recent awards highlight the fact that RMB advised on some of the largest transactions in the South African market during 2008,” says Formby.

However, a downturn in share prices and volatility in equity markets means it is less likely that corporates will want to conclude large transactions until more confidence returns to the markets. “While 2008 was a relatively good year for M&A, we saw deals announced decline in the fourth quarter and further in the first quarter of this year so the environment will definitely become tougher for all players in the industry. South African banks have also become more conservative resulting in scarcer and more expensive capital,” Formby says. “One of the consequences is a dramatic slowdown in activity in the once prolific leveraged buyout market.”

Formby believes activity during 2009 will be driven by advice required by companies wanting to strengthen their balance sheets given the scarcity of funding and general risk aversion. “Falling commodity prices also mean that stronger players in the sector will be able to pick up attractive assets at rock-bottom prices,” Formby says.

Until investor confidence returns and some of the major issues in the international economy begin normalising, activity in the M&A market is expected to remain relatively subdued.

Summary of RMB’s recent awards

Ernst & Young Annual Review of M & A Activity

• Ranked first as Investment Adviser for the highest value of M&A transactions advised on (R141.3 billion).
• Ranked first as Sponsor for the highest value of transactions for which RMB acted as sponsor (R94 billion).

DealMakers 2008 Awards

• DealMaker of the Year by deal value (M&A). (R92-billion)
• DealMaker of the Year by deal value (general corporate finance activity). (R350-billion)
• Deal of the Year. Richemont/Remgro restructuring. (R180-billion)
• Dealmaker of the Year. Paul Roelofse
• Private Equity Deal of the Year. Alstom (R5,2-billion)

End

Contact

James Formby on 011 282 8229

Return to media releases.