Speech

In this presentation, I am going to find out the acquisition of AnaCap Financial Partners on the

Brightside Group that took place on Jul 25, 2014 for £127M. The parent company that I have

opted for this presentation is “AnaCap Financial Partners” which is a UK-based private equity

firm that is aimed at investments in the European financial services sector. It was founded in

2005. “AnaCap Financial Partners” has been involved in fund raisings along with the aggregate

commitments that are €4.4 billion in the private credit and equity strategies and also in the con-

investment plans. The company is a successful example of investment agencies as the funding of

AnaCap Financial Partners has drawn the attention of global investors with the inclusion of

certain prestigious institutes such as Allianz, Honeywell and, Goldman Sachs. The company is

determined to build-up and transforms dynamic and fast growing businesses. The private equity

team of the AnaCap Financial Partners focuses to transform and build-up & flourishes the

businesses across the Europe. The company intends to maximize the asset performance of a

targeted group or company by the use of certain active operational strategies & involvement of

expert team. While the subsidiary company that I opted for this assignment is the Brightside

Group. It was founded in 2006. It is a UK-based company that runs financial services business

and insurance broking in the UK. It’s corporate office and headquarters is based in Bristol and

have offices in Torquay and Southampton. This company is registered in the United Kingdom

and has been regulated in the light of rules & regulation of the Financial Conduct Authority

(FCA). This company was listed in the Stock Exchange of the UK. However, in 2008, a reverse

takeover between the BrightSide Group Plc. And Aust Holdings Limited took place. The

company took over the Group Direct and all the associated firms. The BrightSide Group changed

their policies regarding the basic business strategies and activities of these companies from the
financial rehabilitation to the process of insurance broking of these firms. Outstanding at the date

of signing is a pending litigation case with Southern Rock Group regarding a number of specific

issues relating to the termination of contracts. Brightside Group plc. Was preparing a positioning

statement in advance of mediation, however, at this stage an estimate of the financial effect of

the litigation cannot be made. In 2014, the acquisition of the BrightSide Group by AnaCap

Financial Partners took place as the company was delisted from the AIM Stock Exchange. It was

purchased by the AnaCap Financial Partners at the rate of £1.27 per share. I am going to analyze

the effects of this acquisition on the BrightSide Group’s Financial and non-financial health. I

have opted for these companies because this acquisition was widely discussed in the financial

circles and the issue also gained the attention of media and newspaper. It is one of the successful

examples of acquisition that imparted positive impacts on the subsidiary company.

Financial Position of BrightSide before the acquisition by AnaCap:

Within trade and other receivables the premium finance loan book stood at £25.2m, of which

£2.3m was deferred interest, representing a like for like decrease of 28% (2012: £35.6m). The

reduction in size of our on balance sheet premium finance loan books was undertaken in order to

manage our cash resources to make the required payments to Southern Rock as noted above. The

£25.3m loan book balance was financed with internal cash resources and the use of our banking

facility which was drawn to £20.5m at the year end. To compensate for the reduction in on

balance sheet premium finance lending the Group increased its utilization of third party premium

finance funders during the year. The return on average capital employed (calculated as operating

profit over total equity and long term borrowings) was 14% in 2013 (2012: 25%).Cash and cash

equivalents have decreased £5.5m from prior year driven by the settlement payments made to

Southern Rock in the year.

Financial Position of BrightSide After the acquisition by AnaCap:

After the acquisition of Brightside, it had been delisted from the Stock Exchange. Therefore, the

financial statement of the company after the acquisition is not available to the public for analysis.

Moreover, the financial statements of AnaCap are also not available to the public for analysis as

it is a private equity firm. Conclusively, it is not possible to determine whether the acquisition

was successful or a failure. However, the directors of Brightside had optimistic expectation

towards the acquisition. According to the Brightside financial statements for the year ended 31

December 2014, after which it had delisted from the Stock Exchange, the directors believed the

offer price reflects a fair price for the Brightside Group and provides shareholders with an

opportunity to realize their entire shareholding in cash at a substantial 32 per cent premium to the

Brightside share price prevailing on 7 May 2014 (being the last Business Day prior to the

Announcement). The Directors note that there can be no guarantee that Brightside Shareholders

would otherwise be able to realize their shareholdings in Brightside at a price of 25 pence per

Brightside Share or higher in the short to medium term. This gives a hint that this was a golden

opportunity for the company and its shareholders. It is to be noted that the before the acquisition

of Brightside by AnaCap, the company was having a shortage of cash due to Southern Rock

Litigation relating to termination of contracts. Hence, the cash acquisition by AnaCap could have

proven to be a lifesaver for BrightSide and the reason for its survival up to date. This can be used

to derive the conclusion that the BrightSide acquisition by AnaCap has been successful.
 Citations

Advfn. 2014. Ukadvfncom. [Online]. [25 January 2020]. Available from:

https://uk.advfn.com/stock-market/london/BRT/share-news/Brightside-Group-PLC-

Suspension-of-listing-and-tra/63009963

Crunchbase. 2014. CrunchBasecom. [Online]. [25 January 2020]. Available from:

https://www.marketbeat.com/stocks/LON/BRT/

Insurance times. 2014. Newsdesk. [Online]. [25 January 2020]. Available from:

https://www.insurancetimes.co.uk/anacaps-brightside-takeover-goes-

through/1409284.article

Stephan. 2014. Investigatecouk. [Online]. [28 January 2020]. Available from:

https://www.investegate.co.uk/brightside-group-plc--brt-/rns/final-

results/201405081530066336G/

Christie. 2014. Anacap. [Online]. [28 January 2020]. Available from:

http://www.anacapfp.com/media/25367/9-july-24-2014-anacap-completes-acquisition-

of-brightside-group.pdf

Crunchbase. 2014. CrunchBasecom. [Online]. [25 January 2020]. Available from:

https://www.crunchbase.com/organization/brightside-group