Jefferies’ Post

Automotive aftermarket industry revenues and profits are far more inelastic than other services-focused industries – a trait that private equity investors value. Despite the sector’s size and consistent record of profitability, it is highly fragmented and dominated by individual- or family-owned businesses. Generally, the largest companies in any given subsector have a small single-digit percentage share of that overall market, creating a compelling opportunity for private equity investors looking for long runways to grow platform businesses. Read more here: https://lnkd.in/e_P_esAN

In studying more than 2,000 PE transactions over the last ten years, we’ve discovered that the secret to the top performers’ success does not lie in any fundamental structural advantages they hold over public companies. Rather, it lies in the rigor of the managerial discipline they exert on their businesses. Despite the widespread assumption that the stock market forces managers to concentrate on increasing the value of their companies, many executives of public companies lack a clear focus on maximizing economic returns. Their attention is divided between immediate quarterly financial targets and vaguely defined long-term missions and strategies, and they are forced to juggle a variety of goals and measurements while coping with contending stakeholders and other bureaucratic distractions. In stark contrast, the top private-equity firms focus all their energies on accelerating the growth of the value of their businesses through the relentless pursuit of just one or two key strategic initiatives. They narrow their sights to widen their profits.

Our recently published paper, with Uliana Filatova, "Analysts’ Institutional Client Catering and Reputation Tradeoff: Strategic Timing of Recommendations" in the Journal of Accounting, Auditing & Finance, has been covered by media in several outlets, including CNN https://lnkd.in/es2-zX88 Our paper illustrates a pattern of analysts’ recommendations being more optimistic in the end month of a quarter and less optimistic in the beginning month of a quarter. This timing pattern ties to quarterly reporting periods of portfolio managers, with actively managed mutual funds’ holdings being affected the most. Analysts with Institutional Investor All-Star ranking do not engage in such stock recommendation timing practices. The market participants seem to believe rosy recommendations issued for stocks with more institutional holdings in the end month of a quarter with more positive cumulative abnormal returns to upgrade and downgrade recommendations. A free preprint copy is available on SSRN https://lnkd.in/eX8PRpjx Journal copy: https://lnkd.in/eQKuVVmD

We are pleased to announce our full year results for 2023 – a year of significant progress and transformation for the Group. We have delivered on our commitments in three key areas: • Margin expansion - Delivered double-digit adjusted operating profit growth and margin expansion of 90bps, excluding incremental stand-alone plc costs • Cash generation - Free cash flow of £93 million, ahead of expectations enabled by strong execution • Portfolio transition – Well balanced portfolio; Automotive secured a record order intake, and 72% of Powder Metallurgy’s new bookings awarded for propulsion agnostic products Looking ahead, we expect to further expand margins and grow free cash in 2024, and are confident in achieving our margin target of 10%+ in Automotive by 2026.   Today, we announce our intention to launch a share buy-back programme of up to £50 million and recommended a final dividend, resulting in 2023 dividends of 4.2 pence per share. Click the link to read the full release: https://lnkd.in/eUzTCVsE

What are the high-level advantages & disadvantages of stock purchase in an M&A deal? In a stock purchase, the buyer acquires the target company's stock directly from its shareholders. This results in the buyer owning the entire company, including all its assets and liabilities. Here are the high-level advantages & disadvantages of entering a stock purchase deal structure: Advantages: Simplicity - Stock purchases are generally simpler to execute since the ownership of the entire company is transferred without the need for individual asset transfers. Continuity - The target company continues to operate as before, maintaining existing contracts, licenses, and relationships with customers, suppliers, and employees, which can minimize disruptions. Comprehensive Acquisition - The buyer acquires all of the target’s assets, including intangible assets such as goodwill and intellectual property, and gains control over the entire business. Disadvantages: Liability Assumption - The buyer assumes all existing liabilities and obligations of the target company, which can include hidden or contingent liabilities. Tax Consequences - There may be less favorable tax treatment for the buyer compared to an asset purchase, as the tax basis of the acquired assets does not get a step-up.  #StockPurchase  #M&ATransactions  #DealMaking  #M&ANegotiations  #M&AExperts  #M&AAdvisor  #Top1%M&AFirm

Exciting times ahead as we secure funding for an ambitious manufacturing endeavor! 🔒⁠ Join forces with ROK Financial and let's transform your business aspirations into tangible results. Ready to make your mark in the manufacturing sector? Let's make it happen together! 💡💼

Exciting times ahead as we secure funding for an ambitious manufacturing endeavor! 🔒⁠ Join forces with ROK Financial and let's transform your business aspirations into tangible results. Ready to make your mark in the manufacturing sector? Let's make it happen together! 💡💼

Exciting times ahead as we secure funding for an ambitious manufacturing endeavor! 🔒⁠ Join forces with ROK Financial and let's transform your business aspirations into tangible results. Ready to make your mark in the manufacturing sector? Let's make it happen together! 💡💼

In the #transportation and #distribution industry, the pace of #MergersAndAcquisitions has slowed — but there are some smart opportunities. #GrantThornton's new article examines how to identify prime opportunities at companies with untapped technological value. #technology

In the #transportation and #distribution industry, the pace of #MergersAndAcquisitions has slowed — but there are some smart opportunities. #GrantThornton's new article examines how to identify prime opportunities at companies with untapped technological value. #technology