PwC Deal Talk UK

How can Swiss investors make the most of opportunities in the UK?

In this blog post we look at the opportunities and potential pitfalls of doing deals in the UK, Europe’s second-largest economy and a hugely important trading and investment partner for Switzerland.

Close trade and investment ties with Switzerland, vibrant M&A scene
With direct investments from Switzerland amounting to just over CHF 50 billion at the end of 2015, the UK is one of the top five destinations for Swiss foreign direct investment. It’s similar the other way around, with UK direct investments in Switzerland running at over CHF 30 billion, and nearly 30,000 Swiss jobs attributable to British investments.

The ties aren’t just financial: in 2016 the annual volume of trade between the two countries came to over CHF 50 billion. Deal flow is also stable: in 2017 the UK bucked the recent global downtrend in mergers and acquisitions to post increases in both deal counts and deal value.

PwC’s Deal Talk UK takes a close look at the deals landscape in the UK. It examines the implications of issues such as Brexit, and highlights areas to focus on to ensure deals are a success. Written by members of our team in Switzerland with extensive deals experience in the UK, Deal Talk is designed to give outsiders the benefit of an insider’s view.

Originally from the UK, since joining PwC in Switzerland in 1996 Martin James has provided financial due diligence services to corporate and private equity clients. Markus Widmer spent seven years in London, where he specialised in deals in the retail, leisure and travel sector. Luca Borrelli spent two years in London between 2015 and 2017, working on deals for clients in life sciences and private equity.

What’s the deal in the UK?
The authors describe how despite its transformation from a leading industrial powerhouse in the 19th century to a modern, service-dominated economy, the UK is one of the world’s most developed economies and still a force to be reckoned with. It’s the second-largest economy in Europe behind Germany (having recently overtaken France), with growth driven by a diverse and dynamic services industry. An attractive economic environment is likely to boost M&A activity going forward.

What’s the catch?
The success of the UK economy is closely bound up with London’s prominence as a global financial hub. While London is also a centre for the creative, media and technology industries, financial services is what dominates the London economy – which is growing at twice the rate of the country as a whole. But the importance of finance is precisely what makes it the Achilles heel of the UK economy. Think Brexit. Depending on the outcome of negotiations on trade relationships between the UK and the EU, Britain’s role as the centre of European financial services could be in jeopardy. This could have major implications – both positive and negative − for investors seeking deal opportunities.

What are the conclusions for investors?
The recent uncertainty surrounding Brexit has created opportunities for foreign investors. It has led to a devaluation of sterling, which is making UK acquisitions much cheaper for foreign investors. And it has increased the attractiveness of inbound investment in export-driven UK companies. By the same token it has put pressure on companies such as retailers that have a high share of imported products.

Another key factor is the relationship between the UK and the US. Most deals over the past five years, both inbound and outbound, have been done with the US, with technology, media and telecoms leading the way. Uncertainty on Brexit negotiations means that it’s important to keep an eye on how deal activity between the UK and the US develops.

A short checklist for successful UK deals
Our Deal Talk UK surveys the British landscape and looks at the main areas for prospective investors to keep an eye on. If you need a useful checklist, here’s a summary of the key points to bear in mind:

  • Private equity: The UK has a well-developed private equity (PE) industry. The market is mature, with transactions including secondary, tertiary and even quaternary buyouts. Backed by one of the world’s largest financial centres, PE houses have good access to capital and debt financing ranging from seed capital to LBOs.
  • Key deal terms: Private equity involvement in deals is high and most deals run in competitive auctions. Purchase price adjustments are less common. Sellers typically ask for a daily cash profit. PE sellers try to limit the periods for warranty claims, and the use of R&W insurance is very common – and worth including in your calculations and deal timeline.
  • Sell-side advisors: Sellers are usually supported by a lead advisor, and vendor due diligence is extremely common. Buyers need to be prepared to run competitive and fast-paced processes. This type of service is also often required by banks and private lenders in order to finance a deal.
  • Accounting standards: The new financial reporting framework became effective on 1 January 2015. UK GAAP is a true and fair accounting standard. Small entities profit from a specific financial reporting standard and have to prepare abridged accounts. Companies are required to have their annual accounts audited but an exemption applies to small companies. Annual accounts have to be filed and are publicly available.
  • National living wage and pension: From 1 April 2016 there has been an obligatory minimum wage payable to workers over 25 in the UK. The national living wage is expected to increase gradually between now and 2020. This is likely to lead to personnel cost inflation in sectors with low-income workers, and this in turn might significantly impact profitability. Employers have to enrol their employees in a workplace pension scheme. Historically, companies often had unfunded defined benefit schemes, but now most of these have been closed and defined contribution schemes are prevalent. Nevertheless, companies may have legacy pension liabilities which need to be assessed as part of the due diligence process.
  • Trade unions: Although the number of employees belonging to a trade union has declined sharply over the last 20 years, in blue collar dominated workforces unionisation might still be relevant in a deals environment.

These are some of the main points to bear in mind if you want to increase your chances of a successful deal. If you like to find out more, check out PwC Deal Talk UK, or contact us for a more in-depth conversation about doing deals in the UK. Best of luck!

Successful Transactions with PwC


PwC is pleased to announce the closing of Banque Cantonale Vaudoise’s (BCV) divestment from “Tour Galfetti”, a mixed-use group of buildings of circa 20’000m2 located in the center of Lausanne.

Lausanne | Despite the relative complexity of this asset, the new owner, a leading institutional investor, was seduced by its exceptional location, its very high technical and architectural qualities, the tenant mix, and its economic potential.. We are delighted that our team was given the chance to satisfactorily help BCV in such a challenging transaction, including an initial phase of minute review and assessment of technical, legal, tax and value aspects.

Your PwC Team

The engagement was led by Dan Bihi-Zenou and executed thanks to the great support of Rubina Insam and Arnaud Egea. Invaluable support was provided by Alex Astolfi, Marie Seiler and Marcel von der Assen. The Partner in charge was Kurt Ritz, Head of Deals.

First PwC Real Estate Investor Survey for Switzerland

Where are the most lucrative real estate investments to be found in Switzerland? What kinds of property? How does the Swiss market differ from Germany?

PwC’s first Real Estate Investor Survey conducted by experts in Switzerland and Germany comes up with a number of key findings:

  • Overall, all-risk yields (ARYs) in Switzerland are lower on residential property than on office space.
  • Both residential and office properties tend to yield more in smaller Swiss cities than in Zurich and Geneva, and even more in outlying regions.
  • The differential between the Big Two (Zurich and Geneva) and the other cities is even greater for high street retail property.
  • Over the next twelve months most investors believe residential rent growth will stagnate, and anticipate negative growth in office rents in most cities and all outlying regions. They also predict negative growth for high street retail rents in all cities bar Lucerne.
  • Residential assets are very popular in Switzerland but only a niche in Germany, where investors favour the logistics market.
  • PropTech – technology start-ups for real estate – are an exciting prospect, but given the uncertainty it’s too early to invest

New, comprehensive study on Swiss real estate

What are all-risk yields (ARYs) for real estate investments in Swiss cities and regions? And how much higher are they in the German market? PwC’s Real Estate Investor Survey answers these questions for the first time with a comprehensive study based on interviews with leading Swiss institutional investors. In response to the growing interest in investments abroad, especially in Germany, we at PwC Switzerland teamed up with our colleagues in Germany, who had already published this semiannual study six times.

The study’s main focus is the development of interest rates and yields on real estate investments. In this light we asked our interviewees about the ARYs at which they are willing to invest in Switzerland’s Top 9 cities and eight regions. We also polled their views on the development of interest rates, letting parameters, growth perspectives and the methodology for calculating net operating income (NOI).

While the section of the report on the Swiss market comprises data on residential, office and retail real estate, the section on Germany focuses on office, retail and logistics. This mirrors the fact that while residential assets are highly popular among Swiss investors, they remain a niche in the German market. Instead, the logistics market is of great importance in Germany.

The findings for Switzerland in detail:

Residential property
For residential properties, the city of Zurich shows the lowest yields among Swiss cities. The median ARY for core properties in Switzerland’s largest city is 2.5%, and investors will also accept significantly lower yields in individual cases. The average ARY for all Swiss residential properties is 2.9%, only slightly less than residential property in Geneva (3.0%), Bern (3.2%) and Basel (3.2%). It’s not just the city of Zurich that exhibits the lowest ARYs: the region of Zurich (excluding the city) averages an ARY of 3.3%, followed by the Lake Geneva Region (3.4%) and Northwestern Switzerland (3.5%). There is a consensus among most investors that residential rent growth will be stagnant over the next twelve months.

Office property
Zurich and Geneva again top the bunch for office real estate, with the lowest ARYs for core (2.5% each) and average office properties (3.3% each). At the other end of the spectrum, Lugano (3.7%) and St. Gallen (4.0%) exhibit the highest average ARYs. As for the regions, Zurich (average 4.2%) and Central Switzerland (average 4.4%) have the lowest yields on office property. Strikingly, the spread between the regions and the Top 9 cities they surround is significantly larger than for residential property. Office rent growth is expected to be negative for all regions, as well as for the cities of Zurich, Geneva, St. Gallen and Lugano.

Retail property
Core high street retail properties in Zurich and Geneva yield 2.5% ARY, similar to the figure for office use. Switzerland’s two largest centres thus come in well below the remaining Top 9 cities. The regional ranking for retail property is slightly different than for residential and office use, with the Lake Geneva Region and Central Switzerland (average ARY of 4.3% each) moving past Zurich (average 4.4%). Rent growth is expected to be negative for all geographies, except the city of Lucerne.

Special focus: PropTech
This report features a special spotlight topic, PropTech. PropTech refers to start-ups in the real estate sector developing technology for application in areas from brokerage and management, financing and due diligence to development. Despite the rapidly growing number of new businesses, the study finds that there’s still too much uncertainty for investors to make a move. We assume that reservations will soon be eliminated once more use cases for PropTech become available, allowing market participants to achieve sizeable efficiency gains.

Check out the full PwC Real Estate Investor Survey here and feel free to call us if you’d like to discuss matters in more detail.

How did the Swiss real estate industry start into the year 2018?

PwC – Immospektive Q1/18

The strength of the Swiss economy gives hope for positive impacts to the real estate market, or at a minimum to the current problem sectors of office and retail. The supply on the housing market has continued to grow which has led to an increase in the forecast vacancy rates and a decrease in market rents. Furthermore, it is assumed that interest rates will rise moderately in the long run.

Read more and get up to speed with us


Kurt Ritz
Partner, Real Estate Advisory
+41 58 792 14 49

Marie Seiler
Director, Real Estate Advisory
+41 58 792 56 69

Samuel Berner
Real Estate Advisory
+41 58 792 17 39


Successful Transactions with PwC


PwC unterstützte die Aletsch Riederalp Bahnen AG („ARBAG“), die Bettmeralp Bahnen AG („BAB“) und die Luftseilbahn Fiesch-Eggishorn AG („LFE“) bei der Fusion zur Aletsch Bahnen AG.

Zürich | Das Aletsch-Gebiet rund um den Aletschgletscher („Aletsch-Arena“) als Teil des UNESCO Weltnaturerbes ist eine bedeutsame Tourismusdestination in der Schweiz.

Dank der Fusion entsteht nach den Zermatt Bergbahnen das zweitgrösste Bergbahnunternehmen im Oberwallis mit einem beachtlichen Potenzial. Die Aletsch Bahnen AG dürfte künftig einen Umsatz von rund 40 Millionen Franken und einen Cashflow von über 10 Millionen Franken generieren. Dies bedeutet einiges an Schubkraft für allfällige Ersatz- oder Neuinvestitionen und der Gast wird zukünftig ein noch kompletteres Tourismusangebot vorfinden können. Im Winter verfügt das Skigebiet über mehr als 100 Pistenkilometer, im Sommer umfasst das Angebot rund 150km Wanderwege und 100km Mountain-Bike Trails.

Durch die Fusion können wichtige Kosten- und Nutzenpotentiale erschlossen werden, wodurch die Aletsch Bahnen AG auch für zukünftige Herausforderungen in der Schweizerischen Tourismus- und Wintersportindustrie noch besser gewappnet sein wird.

Bereits Ende Oktober 2017 haben die Aktionäre der drei Gesellschaften mit sehr deutlichen Voten von 90.85% (BAB), 96% (LFE) und 94.43% (ARBAG) dem Fusionsvorhaben zugestimmt. Der Umtausch der Aktien soll nun bis im Frühjahr 2018 abgeschlossen sein.


Das PwC Team

M&A Lead Advisory: Kurt Ritz (Partner), Marco Tremonte (Director), Andreas X. Müller (Senior Consultant), Fabrice Vuilliomenet (Senior Consultant)

Valuation & Financial Modelling: Marc Schmidli (Partner), Thomas Schneller (Director), Sara Ammann (Manager), Yannick Costa (Senior Consultant)

Rechtsberatung: Benjamin Fehr (Partner), Laura Fertitta (Senior Manager)

Steuerberatung: Lukas Scheidegger (Partner), Frédéric Zloczower (Senior Manager), Amadé Ruppen (Manager)

PK-Beratung: Markus Schneeberger (Director), Roger Ehrensberger (Senior Manager)

Wirtschaftsprüfung: Peter Held (Director)


Pressemitteilung –“Fusion zur Aletsch Bahnen AG geschafft”

Successful Transactions with PwC


PwC Corporate Finance advises Thommen-Furler AG (“TFAG”) on the acquisition of alcosuisse ag (“alcosuisse”) from the Swiss government.

Zurich | On January 31, 2018, the Federal Council decided to sell alcosuisse ag, the former profit centre of the Swiss Alcohol Board and sole importer of ethanol products, to TFAG. PwC acted as lead advisor to TFAG throughout the buy-side process.

With the sale to TFAG, the Swiss government completes another important stage of the partial revision of the Alcohol Act, which started on January 1, 2017 by the transformation of alcosuisse from a profit centre to a limited company. The transaction is expected to be completed in mid-2018. Until the next stage in the revision process of the Act – the liberalisation of the ethanol market on January 1, 2019 – the monopoly for the importation of ethanol will remain unchanged and the buyer is not allowed to generate any profit until then.

For more than 100 years, alcosuisse has been providing the Swiss economy with high-quality ethanol products in over 50 different grades at cost-covering prices. With processing facilities in Delémont (JU) and Schachen (LU) and c. 38 FTEs, alcosuisse supplies over 1’500 Swiss-based customers with ethanol products.

TFAG, headquartered in Rüti bei Büren (BE), is specialised in the distribution of chemicals and lubricants, environmental technology, and the disposal and recycling of industrial and hazardous waste. With c. 250 employees, the medium-sized company generates revenues in excess of CHF 120 Mio. and operates branches in Ziefen (BL) and La-Chaux-de-Fonds (NE).

The PwC team

M&A Lead Advisory
Sascha Beer, Partner
Marco Tremonte, Director, Engagement Leader
Andreas X. Müller, Senior Consultant

Financial Due Diligence
Nico Psarras, Partner
Patrick Amstutz, Director
Vincent Lüscher, Manager
Daniel Lötscher, Consultant

Tax Due Diligence
Marcel Angehrn, Director

Pension Due Diligence
Roger Ehrensberger, Senior Manager
Andreas Schuler, Consultant

Successful Transactions with PwC


PwC Corporate Finance advises the shareholders of Addedo on the sale of the company to Talentia Software Group, a portfolio company of Argos Soditic, a Swiss-based private equity investor.

Zurich | PwC Corporate Finance acted as sole financial advisor to the shareholders of Addedo throughout the entire transaction process. The transaction has closed on December 20, 2017.

Founded in 2007 as a spin-off from Frango consulting services, Addedo has demonstrated an impressive growth and evolved to Switzerland’s leading distributor of and consultant for IBM Cognos Corporate Performance Management (CPM) software. More recently, Addedo has begun to access new markets by founding subsidiaries in Germany and Canada. In an attempt to promote further growth and tackle untapped markets, the shareholders of Addedo have explored the possibility to sell a major stake to a strategic partner.

With more than 3,600 customers in over 30 countries, Talentia Software is a market-leading European software provider of Finance software (Accounting, Financial Performance) and HR software (Payroll, Human Capital Management).

Viviane Chaine-Ribeiro, President of Talentia Software: “This acquisition is a new critical step in our external growth strategy. It will further reinforce our market lead on the fast growing CPM market and accelerate our growth in countries such as Switzerland and Germany. It will also enable us to set foot in North America where Addedo recently opened an office.”

Michael Kempter, President of Addedo: “We are pleased to join Talentia Software and merge our skills and capability. We share common values, including the commitment to delivering the highest quality of service to our clients.”


The PwC team

M&A Lead Advisory:

Dr. Martin Frey, Partner

Dr. Andreas Plattner, Director

Matthias Büeler, Senior Manager

Nikola Gozze, Senior Consultant


Successful Transactions with PwC


PwC Corporate Finance advises Swiss private equity firm Cross on the sale of spirella to Menage Selection Valnet S.A.S. (MSV).

Pfäffikon | The Swiss private equity house Cross and MSV have signed a share purchase agreement to hand over spirella to MSV. Closing of the transaction is anticipated for mid of January 2018.

spirella, headquartered in Embrach, Switzerland is a leading Swiss provider of high-quality bathroom accessories, with two subsidiaries in France and Germany, as well as global export and distribution capabilities. The Company’s products are sold in over 60 countries and enjoy a high degree of brand awareness. Cross acquired the Company in June 2010, as part of a Management Buyout.

spirella’s new owner is MSV, a family-owned, French enterprise headquartered in Rivesaltes, France. The Company, being managed in the second generation by the Sobraques family, offers quality-oriented home solutions for the bathroom, kitchen and general household. MSV has locations in Spain, Germany, Croatia, Belgium, Serbia and Italy, as well as a distribution network spanning over 30 countries.

The PwC team

Martin Frey
Partner, Corporate Finance/ M&A

Andreas Plattner
Director, Corporate Finance/ M&A

Andreas Schmuckli
Manager, Corporate Finance/ M&A

Jasmin Jäger
Consultant, Corporate Finance/ M&A

Dominique Schwarzen
Consultant, Corporate Finance/ M&A

PwC Deal Talk Year-End Edition 2017

Doing Deals abroad from a Swiss Investor’s Perspective

The world’s a big and fascinating place, and it’s the differences that make travel abroad such a rich and rewarding experience. Smart travellers buy a travel guide before setting off for a new country. For investors venturing into unfamiliar territory there is even more at stake, and it makes even more sense to find out not only what the local attractions are, but how to negotiate the potential pitfalls.

PwC’s Deal Talk is a series of guides for Swiss investors with their sights on opportunities beyond our borders. In 2017 we covered six major investment destinations at two-month intervals – Australia, Brazil, Canada, France, India and the United States – and there will be more in 2018. Each issue of Deal Talk focuses on the peculiarities of doing deals in a particular country. It’s a great way to start your preparations.

Of course there’s nothing like an experienced travel guide or a person with local knowledge. Within PwC’s global network we actively foster exchange across borders, allowing us to amass a rich pool of global know-how and local savvy from people who have experienced business in all these countries first-hand – and share it with you.

Read Attachment

Contact Us

Sascha Beer
Corporate Finance / M&A
Tel. +41 58 792 1539

Nico Psarras
Head of Transaction Services
Tel. +41 58 792 1572

PwC Deal Talk – Doing Deals in Brazil from a Swiss Investor’s Perspective

Edition 6/2017

Brazil is the world’s ninth largest economy, the largest in South America, its most populous country and a prominent BRIC member. It is also becoming more and more an important trading partner of Switzerland. In the last decade, bilateral trade between both countries has more than doubled. Indeed, Brazil is attracting an increasing number of small and medium-sized Swiss companies because of its growing consumer market, while Brazilian firms continue to show a keen interest in Swiss technology and services firms that could be either catered to or acquired.

Despite significant progress, investors still face numerous challenges when they approach Brazil. There is a complex regulatory environment with regard to tax and labour, as well as high taxes and social charges on payroll, sales and income. Multiple taxes and fast-changing legislation can affect business plans and increase risks on contingent liabilities, potentially blocking the success of both asset and stock acquisitions. With first-hand experience and local teams on the ground, PwC can help you to avoid common pitfalls when doing deals in Brazil.

Read Attachment

Contact Us

Sascha Beer
Corporate Finance / M&A
Tel. +41 58 792 1539

Nico Psarras
Head of Transaction Services
Tel. +41 58 792 1572

John Tavares
Transaction Services
+41 58 792 9386

Grasiele Neves

International Tax Services – Brazilian desk
+41 79 350 5138