Archive for May, 2010
In the annual East Midlands Dealmakers Dinner, it was good to see that the Bishopsgate team had been shortlisted as Advisory Team of the Year. Congratulations to Catalyst who won the award and also to John Garner of LDC for scooping this year’s Dealmaker of the Year. John worked on the Cranswick IBO with the Bishopsgate team and he also had a busy year completing a number of transactions in a quiet market place.
The mood at the Dinner was certainly a lot brighter than 2009 with many M&A houses confident that the market has turned the corner. With a busy start to 2010, the Bishopsgate team will be pushing again for the 2010/11 Advisory Team of the Year award.
Capital Gains Tax folly …..
With the corporate finance industry reeling from the news that CGT rates are going to rise sharply, we may look back fondly at the Blair/Brown years with an 18% flat rate and generous entrepreneurs’ relief. With the world’s leading economies typically having CGT rates at 10% or lower, the last thing we need now is to embrace the “Robin Hood” politics of the Lib Dems.
What is very revealing is that historically the higher the CGT rate, the lower the tax revenues it raises. Simply put, if you increase CGT too high, people will sit on their assets until the tax environment improves, or they will find ways of avoiding it entirely. We were with an owner manager only last week who is looking to sell his business in 2011/12 for a valuation in excess of £30 million. We talked a lot about his business but we also talked about the countries where he may emigrate to such as Switzerland, Jersey and Belgium. Yes, this entrepreneur will simply hop abroad before he sells out along with a flood of other entrepreneurs and wealth creators.
I know we have a major problem with the largest deficit in Europe but a sharp increase in Capital Gains Tax will not raise extra revenues – that is a fact. However, given it looks like a steep rise is inevitable, my advice would be as follows:-
- Introduce a flat rate of 40% on CGT reduced by 3% for every year you hold an asset down to a minimum of 25% after 5 years – this would reward long term savers.
- Introduce generous allowances for entrepreneurs with a flat rate of 10% on the first £2m of any gain on the sale of a business with the balance paid at 25%.
- Retain the personal allowance of £10,000.
Anyway let’s wait and see what happens in the June Budget. We can only pray that we don’t return to the dark days of the 70s and the politics of envy.
Bye, bye Gordon………
Yes, the champagne corks are flying this evening as we wave goodbye to the Labour Government, who judging by the deficit they have left behind could not muster a Maths O Level between them. Congratulations to David Cameron and the fragrant Sam Cam, and we wish you well in your new life at No 10.
Just been interrupted by the wife who hopes that Gordon and Sarah have somewhere to stay this evening, commenting that their departure is rather sudden. I can recommend Late Rooms for good last minute rates or the Travel Lodge near Kings Cross or even underneath the arches at Waterloo Bridge. It’s going to be quite a shock for the departing Cabinet having to get into the front of a car after 13 years, and I would lay odds that Peter Mandelson does not have a driving licence.
With Bishopsgate opening its doors in 1996, we have got used to working under the Labour regime and I have to admit that our industry has done surprising well with Capital Gains Tax at historically low levels and the recent surprise doubling of ‘entrepreneur’s relief’. Let’s hope that the coalition Government with its Liberal leanings will continue to leave our industry alone and encourage the UK’s job creators and entrepreneurs.
Congratulations also to Howard Leigh, the boss at Cavendish Corporate Finance and Conservative Party Senior Treasurer. Your hard work was not in vain!
May saw the Bishopsgate team get off to a flying start with the sale of the Category Management software specialist, Cosmic Solutions to the Finnish based Aldata. This was another first for Bishopsgate in that it is the first UK business Bishopsgate has sold to a company listed on the Helsinki Stock Exchange.
Cosmic is a Grantham based business founded by David Wilkins and it supplies the FMCG sector with a blue chip customer base including Unilever, Carlsberg, Weetabix and L’Oreal.
We wish the Cosmic team well with their new Finnish owners and it may help them if they know some interesting facts about Finland:-
- Finland is a constitutional republic and became a member of the European Union in the year 1995.
- Forest covers about 75 per cent of Finland and water bodies, around 188,000 lakes, make about 10 percent of the country.
- Finland has two official languages, Finnish and Swedish. They also speak English pretty well!
- There are as many as 180,000 islands in Finland.
- Finland is the home of the Santa Claus. He also has an office in the North of Finland, on the Arctic Circle.
- According to the World Audit study of 2006, Finland is the least corrupt and most democratic country in the world.
- Nokia Corporation, a Finnish company, is amongst the largest mobile manufacturers of the world.
- Donald Duck comics were banned in Finland because Donald Duck doesn’t wear pants.
- There are 1.8 million saunas in Finland, of which approximately 500 are traditional smoke saunas.
Well that’s enough about Finland, the Bishopsgate team are certainly clocking up the air miles with transactions under way in California and Brussels and talk of a new mandate in South Africa. Better dig out the swimsuit and sun cream!
The Bishop…… 07/05/2010
HELSINKI, May 6th 2010 – Aldata Solution Oyj ( NASDAQ OMX Helsinki ALD1V) and Cosmic Solutions Ltd today announces the signing of a definitive agreement for Aldata to acquire all shares and assets of Cosmic, a specialist UK provider of category management software, for an enterprise value of approximately 3 million GBP, helping retailers better respond to changes in customer demand, reduce waste, and increase shopper satisfaction.
Click here to read press release on Aldata acquiring Cosmic Solutions Limited