DealMakers - 2020 Annual

Selecting Those Awards

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DealMakersawards are based, essentially, on objective evidence – the value of deals or transactions, and the number of them. In limited instances, judgment has to be applied on the categorisation and value ascribed to a particular deal or transaction. In only five of the awards is selection subjective, and we approach these with considerable circumspection. All five 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, the Business Rescue Transaction of the Year and the Individual DealMaker of the Year.     

 

Nominations received by industry participants are reviewed by the editorial team which produces a list of those it believes best qualify for consideration. The list together with additional information for each nominee in each of the categories is delivered to members of the Independent Panel who produce a short list and winner for each award.

 

The Independent Panel for the 2020 Awards was chaired by Bernard Swanepoel, former CEO of Harmony Gold and Village Main Reef and current chairman of the Joburg indaba; other panellists include Funke Ighodaro, former CFO of Tiger Brands and Primedia and founder of Kagiso Trust Investment, and Phuthi Mahanyele-Dabengwa co-founder of Sigma Capital, former CEO of Shanduka and current CEO of Naspers SA.

 

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.

 

Business Rescue Transaction of the Year:

  • Execution complexity – did the transaction include numerous parties? Was the business sold as a whole or broken up and sold off in parts? Does it involve many and/or complex regulatory approvals?

  • Transformational transaction – did the transaction save the business or even the industry in which it operates? To what degree were the various stakeholders accommodated. 

  • Time frame – was the process successfully completed within an acceptable time frame?

 

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 advisers, clients and the industry in general?

 

2020 was a year like no other. Teams had to work hard to get deals back on track, with many needing restructuring and innovative solutions as the effects of the pandemic saw companies delivering below expectations.