Moving from a senior investment banking role in Citigroup to Head of ReSolve’s growing Corporate Finance team was a significant move for David. Here are some of his thoughts, six months in.
Q: What spurred you to make the transition?
DH: I had been tracking ReSolve for some time and appreciated their innovative approach to providing solutions to clients’ critical problems. In talking to Cameron I could see ReSolve had an ideal platform, team and mindset to deliver great value to stakeholders with uncompromising integrity.
Q: TMT has been an area of specialism in your strategic M&A work. Do you think the fast paced growth in that area can translate across other sectors?
DH: Being involved in TMT means you frequently come across situations which have not been well flagged (as new business models evolve) and which understandably gain a strong investor or acquirer response. Other fast-moving sectors have similar characteristics and the effect is also relevant in some of the cross-border work which we do where an attractive asset becomes unlocked from an little-know ownership structure and attracts a lot of investor interest.
Q: What do you think makes for a good buy-side deal?
DH: Mandates from clients to look for potential businesses to acquire can be attractive, but I have found the deals that generate the most value to all are those that fall under the radar. Without an auction to bid prices up, better value can be injected into the deal for the business that is being acquired. In ReSolve, long term relationships with our clients who have an ongoing and active acquisition plan can also make for really insightful and well structured deals.
Q: And on the sell side – do you think the investors are out there?
DH: Yes we have brought several original transactions to the market where clients are raising capital or selling a significant equity stake. We have found a very strong reception for well-structured transactions. We are prepared to put in hard work and commitment to understand the dynamics of a company, its shareholders and management so we can find the right investor. At ReSolve we have a strong network of potential investors and can quickly idenitify and access the most appropriate target investors.
Q: Why do you think a practice with a background focused on more challenging business situations can develop its reputation in the M&A space?
DH: I think both sides can learn from each other. The headline values of deals in the turnaround business tend by definition to be smaller, but some of the innovative approaches to restructuring companies under the pressure of time have real validity no matter what scale. By the same token, our corporate finance offering provides clients with clear analysis and the ability to help them achieve their strategic ambitions and maximize value.
The lower end of ReSolve’s insolvency work is forming an increasingly smaller proportion of the group’s fees as we build the Corporate Finance capability so any tension there is disappearing quickly.
Q: Finally, where do you see ReSolve fitting into the Corporate Finance market – is it not an already crowded area?
DH: I find that there is very strong demand for innovative corporate finance services in the mid-cap space. ReSolve Corporate Finance has been incredibly active since I arrived in March, supporting our clients in the execution of significant transactions across multiple territories and industries. For example, we have acted for one of the largest healthcare companies in the world on two acquisitions of £20 and £80m; a founder shareholder on the buyout of a €300m TMT business; a financial investor on the raising of capital from family offices for one of their portfolio companies (as part of a $400m equity raise); and we have just been mandated to help on the sale of a fast growing transportation company and the raising of €25m development capital for a branded consumer goods company. The combination of M&A, capital raising and restructuring skills combined with a team culture which genuinely puts the client first, positions us very well.