Past Transactions

Brereton, Hanley and Company is a generalist investment banking firm with experience spanning a broad range of industries. Below are some of the sectors in which we have completed transactions and which we actively follow through research.

Food/Beverage and Agribusiness

Cal Organic (Tri-Duncan Farms)

Sturdy Pet Food

Food Research Report [170k, PDF]

In these uncertain times, rife with bankruptcy and restructurings, the Food and Beverage sector has remained healthy. According the U.S. Census Service Sector statistics, Food and Beverage sales have grown a typical 2.2% over the last twelve months. This performance, combined with the sector’s defensive nature, private equity interest and pressure from retail consolidations have translated into a flurry of M&A activity. There are also several major and exciting consumption and demographic trends that are driving growth in certain sectors and stimulating interest from opportunistic strategic and financial buyers. Two of the most prominent developments are the Organic and Ethnic food markets.

Healthy Living Sector

ACTA

Cal Organic

With continued education and media support, American’s are more health conscious now than ever. Nutrition and exercise have become the backbone of many burgeoning industries.

The nine billion dollar organic food industry is poise to become a nationally recognized segment of the food and beverage industry. The health conscious attitudes of the 1990’s have shifted from low-fat foods to foods containing natural and organic materials, rich in flavor over void of fat. Despite representing a mere 2% of the U.S. food market, the sector’s annual growth rate is predicted to roll at 18-25% per year for the next five years, compared to the conventional food industry’s rate of 2-3%. What’s more, organic products are still demanding a 20-50% pricing premium over non-organic foods, providing larger margins along the sales channel.

Tax Consulting

Municipal Resource Consultants

Equitax

Especially in these difficult economic times, effective tax management is of critical importance. The tax, audit and recovery market has met this demand with increased technology and innovative customer management techniques. Companies who have cultivated methods to deliver enhanced value to their customers through added advice, service and multi-level relationships continue to grab market share.

Recreational Equipment Market

Dramatic innovation, technological advances and cultural changes have created numerous opportunities in the recreational equipment markets. The U.S. industry manufactures primarily high-quality recreational equipment products and is viewed by overseas consumers as a leader in product development. As a result, U.S. name brands are recognized and sought throughout the world. Small entrepreneurs and firms, many of who are now large, profitable companies, developed innovations such as mountain bikes, in-line roller skates, and snowboards in this country. As technologies change and new sports are invented, these explosive growth opportunities continue to exist and draw attention from a global marketplace. Our firm has advised companies in this market.

Information Technology

Data Image Services

Cygnet Labs

With headquarters in Silicon Valley, we have seen the scope and variety of the IT industry expand exponentially over the past several decades as a result of improvements in hardware performance, software programming techniques and changes in market needs and expectations. What was once a relatively small industry with a limited number of programs has exploded into one with a rapidly expanding volume and variety of products that are performing increasingly sophisticated tasks and serving new and unanticipated markets. Indeed IT pervades all areas of society. It has become one of the fastest-growing and innovative economic sectors as businesses and governments around the world expand expenditures to increase their operational efficiencies.

This unprecedented growth and recent economic difficulties have led to growing consolidation as firms merge with and acquire other IT producers to augment their products’ capabilities, participate in leading-edge technologies, and expand their marketing reach. According to Software Magazine’s ranking of the 500 leading software companies around the world, the top 10 vendors accounted for $50.7 billion, or 55 percent of total revenues, in 2002 and employed two-thirds of the workforce.

Construction Trades

Crown Services

The pursuit of sustainable development brings the built environment and the construction industry into sharp relief. This sector of society is of such vital, innate importance that most other industrial activities in the world simply fade in comparison. In every country in the world, the built environment normally constitutes more than half of total national capital investment, and construction represents as much as 10% of GNP. Precise statistics about the size and importance of this sector do not really exist, but it is widely recognized today, with its estimated 111 million employees worldwide, as being the world’s largest industrial employer, accounting for approximately 28% of all industrial employment.

Even more amazing is the fact that the construction industry consists overwhelmingly of small and medium-sized enterprises, or more accurately ‘micro firms’. It is estimated that 97% of all firms have fewer than 500 employees and that 95% of these firms have ten or fewer employees. Moreover the structure of the industry continues to fragment with consolidation of the larger firms and an ever-increasing number of small firms.

Permanent Facilities Services

Facilities Research Report [263k, PDF]

The domestic facilities services industry has experienced dramatic changes over the past two decades. Hundreds of institutions have been consolidated, restructured, or newly formed. Business entities have come to realize that maintaining a well-managed and highly efficient facility is critical to success. New technologies, security issues and health concerns also have had a major impact on the importance of and need for facility professionals in organizations. Facility managers have witnessed an increase in their responsibilities for providing a safe and effective workplace for employees.

While the facilities management industry has a tremendous opportunity to grow stronger and play an even more dominant role in fueling economic activity, it is facing many challenges, particularly for small to middle market sized firms. A weak economy has had a significant effect on this cyclical industry, and pressure from limited pricing power and wage inflation remains very real. Additionally, major one-stop, multi-service organizations are gaining an ever increasing market shares as consolidations and growth capital distributions are concentrated within a few leading firms.

Financial Services

Few industries have witnessed a flood of M&A activity as dramatic and influential as that of financial services over the last three years. Consolidation is increasing the size of the leading players in most segments of the industry. In all sectors except securities, the top 10 firms have increased their share of assets since 1995, while the number of participants is shrinking, a trend that began long before the passage of Gramm-Leach-Bliley. The number of commercial banks fell from about 25,000 before World War I to 8,096 in 2001; securities broker/dealers numbered 9,515 in 1987 and only 7,029 in 2001; life insurance underwriters fell from about 2,200 in 1985 to 1,549 in 2000. The number of property/ casualty insurers, now numbering 3,215, is expected to fall by 30 percent over the next decade.

Consolidation is occurring both within sectors and across sectors, but at a slower pace overall than in the late 1990s. However, while deal value has declined significantly in some sectors, many broker/dealers and investment advisers changed hands in 2001 as did many banks and insurance agencies. We have significant experience in this sector.

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