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.

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

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

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

Edition 5/2017

Being historically dependent on mining and manufacturing, Australia is now a diversified services provider with strong links to Asian and US markets.

M&A activity has increased in recent years with deal volume growing at a CAGR of 6.5% between FY12 and FY17, reflecting attractive fundamentals such as the availability of cheap debt, close proximity to Asia and the relatively weak AUD.

Switzerland-based corporates and financial investors have been investing in Australian companies for decades and the continent continues to offer attractive investment opportunities, fueled by trends such as the ongoing privatization of government assets or the country’s growing demand for healthcare services.

Australia has a unique set of regulations in place and commercial, taxation and accounting aspects need to be considered carefully. With first-hand experience and local teams on the ground, PwC can help you to avoid common pitfalls when doing deals in Australia.

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

Roshan Emmanuel
Senior Manager
Transaction Services
Tel.+41 58 792 4260

Marc Huber
Senior Manager
Transaction Services
Tel.+41 58 792 1416

Pablo von Siebenthal
Manager, Corporate Finance / M&A
Tel.+41 58 792 2295

Successful Transactions with PwC


PwC Corporate Finance advises Lonza on the acquisition of Micro-Macinazione

Geneva | A team of PwC Switzerland led by Martin Frey, Partner Corporate Finance/M&A, acted as lead advisor to Lonza Group AG (“Lonza”), a Swiss leading supplier to the pharmaceutical, biotech and specialty ingredients markets. Founded in 1897 in the Swiss Alps, Lonza today is a well-respected global company with more than 50 major manufacturing and R&D facilities and nearly 14,000 full-time employees worldwide.

With over 45 years of experience, Micro-Macinazione S.A. is a leading provider of micronization services and equipment for the Pharmaceutical & Fine Chemical industry. The company was acquired in 2012 by Cross Equity Partners, a Swiss Private Equity fund active in the development of mid-sized companies in Switzerland, Germany and Austria.

Acquiring Micro-Macinazione was strategic for Lonza as it provides micronization technology and expertise that complements its existing US capabilities and provides additional capacity to support its growth.
Thanks to its close relationships with both Cross Equity and Lonza, PwC Corporate Finance team was able to bring both parties together in the negotiation and ensure a smooth and quick deal execution.

The team

Martin Frey
Partner, Corporate Finance/M&A

Maxime Dubouloz
Director, Corporate Finance/M&A

Steve El-Osta
Manager, Corporate Finance/M&A

Labinot Brahimi
Consultant, Corporate Finance/M&A

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

Edition 4/2017

India has seen significant economic growth in the past two decades and has credibly positioned itself as the largest democratically driven economy in the world.

With more than 250 Swiss companies having a presence in India and with a total Swiss foreign direct investment of over USD 3.2 bn in India since the year 2000, the subcontinent is also an increasingly important trade partner for Switzerland.

In 2015, Swiss imports from India amounted to USD 1.0 bn whilst Swiss exports to India (excluding bullion) amounted to USD 0.8 bn.

M&A activity in India has gradually increased over the last 5 years. 2016 saw the highest M&A activity of this period with 1,002 deals with a total deal value of USD 61 bn, whereby USD 29.3 bn (48%) of deal value was linked to cross-border transactions.

India offers attractive opportunities for Swiss Investors, but the environment is vastly different to the Swiss market and there are unique features investors need to be aware of. With first-hand experience and local teams on the ground, PwC can help you to avoid common pitfalls when doing deals in India.

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

Devinder Singh
Director, Transaction Services
Tel. +41 58 792 1432

Successful Transactions with PwC


PwC Corporate Finance advises Giroflex on the sale of the Group and its subsidiaries to Flokk A.S., a portfolio company of Triton

Zurich | A team of PwC Switzerland led by Sascha Beer, Partner Corporate Finance/ M&A, acted as lead advisor to Giroflex Holding AG, a manufacturer of award-winning office chairs generating c. EUR 42 million of revenues with c. 200 employees in Switzerland, Belgium, Germany, France and the Netherlands.

Flokk is one of the leading office chair manufacturers in Europe with sales of c. EUR 140 million and 550 employees. Acquired by Triton, a private equity fund, in 2014, the company has since then made several add-on acquisitions.

According to Flokk’s managing director, Lars Roiri, the acquisition allows Flokk to expand outside of Scandinavia with Giroflex complementing Flokk’s existing activities and geographic footprint. The acquisition is part of Flokk’s goal to double its turnover within three to five years via both organic growth and further acquisitions.

The team

Sascha Beer
Partner, Corporate Finance/ M&A

Marc C. Buser
Senior Manager, Corporate Finance/ M&A

Lasse Stünitz
Senior Consultant, Corporate Finance/ M&A

Nikola Gozze
Consultant, Corporate Finance/ M&A