SG, the corporate and investment banking business of Société Générale is increasing its involvement in the UK private equity market with the formation of its Financial Sponsor Coverage Group (FSC). The new venture will offer UK-based private equity firms M&A advisory and debt financing products.
Managing director, Scott Phillips will head the London-based team of five. He previously worked in SG’s New York Leveraged Finance Group, handling US financial sponsors. Nick Heptinstall has joined the team as director from Merrill Lynch where he covered financial sponsors in the UK M&A group.
There are over 170 firms in the UK financial sponsor sector. Phillips said: “Our competitive advantage is our direct link with the bank’s M&A and debt financing capabilities. These are two of the most important links for the private equity firms.”
He added that private equity houses need a co-ordinated coverage comprising both advisory and debt financing and he expects the team’s combined expertise and network will generate a significant amount of business. The aim is to become a one-stop shop for buyouts with SG’s M&A product and debt finance package.
The bank already has strong links with prominent UK-based private equity firms. Recent deals by SG’s M&A advisory business, SG Hambros include the acquisition of low cost airline Go Fly, and BC Partners public to private of Mark IV Industries, the largest take private by a European private equity house of a US company.
On the debt side, SG has worked on the LBOs of Yell with Apax; Kappa with Cinven and CVC Capital Partners and the mega Messer Gresheim deal with Aventis, Allianz Capital Partners and Goldman Sachs Capital Partners.
Phillips is optimistic about the future: “Deal flow is picking up. Players on the financing side are cautious, but sponsors are actively looking at opportunities, whether it be take privates or MBOs. Activity levels are increasing and it is generally agreed that 2002 should be a pretty good year.”