DealMakers - 2019 Annual

Selecting Those Awards

DealMakers’ awards are based, essentially, on objective evidence – the value of deals or transactions, and the number of them. In limited instances, judgement has to be applied on the categorisation and value ascribed to a particular deal or transaction. In only four of the awards is selection subjective, and we approach these with considerable circumspection. All four are Gold Medal awards and they are for the Deal of the Year, the Private Equity Deal of the Year, the BEE Deal of the Year and the Individual DealMaker of the Year.

     

The first stage with the Deals of the Year is that the DealMakers and Catalyst editorial teams, with nominations from advisory firms, produce a shortlist of those it believes best qualify for consideration, with input from the Independent Panel. The papers and press comment, on each deal is then bundled and delivered to the members of the Panel.

In the case of the Individual DealMaker of the Year, industry players are polled. Companies and units were asked to nominate not more than one individual from their own team alongside up to two of their peers. This produced a shortlist of four nominations with the assistance of the Panel. Biographical information on each candidate, along with the formal nominations, was collated for the Independent Panel. 

The Panel for 2019 was chaired by Rob Wessels, former Nedbank Capital Head of Corporate Finance and Chief Investment Officer at Phembani, and currently acting CEO of Afrisam; other panellists were, Funke Ighodaro who is the Audit and Risk Committee Chair at Massmart and an Independent non-executive director at Datatec and Transaction Capital, and Jurgens Myburgh former Head of Corporate Finance at Standard Bank and CFO of Datatec, and currently Mediclinic CFO.

The Panel ranked the deals/ individuals on the following criteria:

Deal of the Year and BEE Deal of the Year:
•    Transformational transaction – does the deal or transaction transform the business or even the industry in which it operates? What is the extent of potential transformation as a result?

•    Execution complexity – does the overall deal or transaction involve multiple steps/a number of smaller inter-related deals? Are there numerous conditions precedent that need to be fulfilled? Does it involve many and/or complex regulatory approvals? Are there related debt/equity raising processes and how difficult are they to implement? Was there significant time pressure to conclude the deal/transaction? Did the deal/transaction exhibit innovative structuring? 

•    Deal size – not an overriding determinant but a significant factor.

•    Potential value creation – to what extent could shareholders and other stakeholders benefit from the transaction over time?

Private Equity Deal of the Year:
•    Asset with good private equity characteristics – cashflow generative business and able to service an appropriate level of debt? A business model that is resilient to competitor action and downturns in the economic cycle? Strong management team that is well aligned with shareholders and capable of managing a private equity balance sheet? Predictable capex requirements that can be appropriately funded?

•    Deal size – is a factor to filter deals but plays a limited role for acquisitions. It does carry more weight for disposals.

•    Potential/actual value creation – was the asset acquired at an attractive multiple? If the deal is a disposal, was it sold at an attractive price? What is the estimated times money back and/or internal rate of return?

There is limited information available in the public domain on the private equity deals, and even somewhat educated guesswork doesn’t provide all answers in all instances.

Individual DealMaker of the Year: 
•    High profile deals/transactions – that the Dealmaker was involved in, particularly in the last year, but also the last three.

•    Dealmaker’s contribution to the deals – How important was the individual’s contribution to the conclusion of the deals?

•    Execution complexity – same questions as Deal of the Year but for all deals that the individual was involved in.

•    Peer recognition – is the Dealmaker well regarded by fellow advisors, clients and the industry in general?

2019 was a difficult year for the industry with many deals not seeing the light of day. Teams had to work hard to find innovative solutions in an environment shaped by rating agency decisions, the lack of investor confidence and a decline in corporate earnings.