January 23, 2018
At the most recent Daimler AG annual shareholders’ meeting, Dieter Zetsche, Head of Daimler Benz (Mercedes Benz), described the future of the automotive industry as one which will be marked by opposites. Examples included; electric drive versus combustion engines, autonomous driving versus driving pleasure, and vehicle ownership versus shared mobility.
Technology and social trends are disrupting the market dynamics of the automotive industry and re-shaping the industry as we know it. No one better encompasses this than Tesla, who are at the forefront of electrification and automation. From sales of merely a few hundred cars in 2012, the company has grown dramatically to a market cap today of c. $56 billion.
2017 saw worldwide electric vehicle sales surpass 1 million units for the very first time. Already, Volvo have committed to phasing out fuel-powered cars by 2019, and Ford recently pledged $11 billion towards investment in electric vehicles over the next five years. Most of the big automakers are following suit, and Bloomberg’s Electric Vehicle Outlook 2017 report projects acceleration of global electronic vehicles sales to 52% of new car sales by 2040.
On the technological front, global research firm, IHS Markit, forecasts worldwide sales of connected cars will reach 72.5 million units by 2023, tripling sales of 24 million units seen in 2015. In tandem, they predict that more than 33 million autonomous vehicles will be sold worldwide in 2040, a momentous increase from the 51,000 they anticipate being sold in 2021. To remain competitive today, companies are finding new acquisitions in less obvious channels than they are used to. There is now an overwhelming requirement for OEMs, suppliers and mobility service providers to invest in cutting-edge technology, so not to fall behind the rest of the pack. With the rapid pace in which the industry is evolving, it is proving easier to partner with, or acquire, companies already in possession of this technology, than to develop it in-house.
Traditional market players are now not only competing with themselves to build the best vehicles, but against technology companies who are building computers on wheels. We have witnessed several high-profile technology companies seek to gain exposure to the automotive industry. Google and Uber are prime examples, collectively investing billions of dollars to bolster their place in the autonomous vehicle space. In H1 2017, PwC reported the total number of auto-tech deals to be 15; five times that of the same period the year before. This included Samsung Electronics’ $8 billion acquisition of Harman Industries, a global leader in connected car technology. Furthermore, among component suppliers, 16.5% of M&A activity in H1 2017 was attributed to a push for more technology-related acquisitions, with total values growing over and above 100%.
Data privacy, cyber-security, vehicle safety and product liability risks are all by-products of the technological revolution. With Spanish telecom provider Telefonica maintaining that by 2020, 90% of cars will be online, vehicle safety and security has never been so important. March 2017 saw Intel spend $15.3 billion to acquire Mobileye, an Israeli developer of advanced vision and driver assistance systems. We can expect to see more deals with a focus in this area.
The sharing economy is changing a vast array of sectors, including transportation. Julia Steyn, Vice President for urban mobility at Maven (General Motors’ car sharing scheme, launched in 2016), said last year that 80% of Maven’s customer base are between the ages of 18 and 34. According to research firm Frost & Sullivan, the rise of the millennial generation will see the number of members of car sharing services grow from c. 6 million in 2017 to c. 18 million by 2025. The car sharing business model presents a threat to automotive manufacturers, with reduced ownership a likely outcome. Thus, many automakers are actively looking to get involved. Ford, BMW and Toyota have all invested in this area over the last few years and in Q3 2017, Daimler led a $92 million investment round in Turo, one of the largest peer-to-peer car rental companies in Silicon Valley.
The multi-faceted disruptions to the automotive industry present a choice to current market players; they can choose to continue with traditional operations and not be distracted, or jump in so not to miss out on any opportunity. Safe to say, whatever choice is made, companies from other sectors want a piece too. From an M&A perspective, plenty can be expected…
By Sam Barr, Senior Analyst at Bluebox
“We were delighted with the services that Bluebox offered us. Bluebox’s attention to detail through their Diamond Programme ensured that we were well prepared for when the business was taken to market and that the sale process itself was managed expertly.
We challenged Bluebox with finding the right strategic buyer and thereafter negotiating a deal that met our requirements. In helping initially to identify and to secure the deal with Mountville Mills they accomplished just that. Communication throughout was excellent and professional, managing each stage of the process. I would have no hesitation in recommending Bluebox to any corporate shareholder or private business owner looking to divest their business.”
Richard Millward, Former Client
“We were delighted with the services that Bluebox offered us. Bluebox were challenged with finding us the right strategic investor and, thereafter, negotiating a deal that met our complex requirements. In identifying and securing the deal with LGC they have done exactly that. The process itself was efficient and smooth, largely due to the excellent communication from the Bluebox team, who also demonstrated excellent experience at managing a very engaging auction process. I would be delighted to recommend Bluebox to any corporate shareholder or private business owner looking to divest a business.”
Helen Dickinson, Former Client
It has been a real privilege working with the team at Bluebox over this last year or so. Bluebox’s attention to detail ensured that we were well prepared for when the business was taken to market and the sale process itself was managed expertly. Starting the process, I had no idea exactly what this would entail and the volume of work that has been produced by everyone and the result reached today is nothing short of brilliant.
Hugh Morris, Former Client
We are delighted with the services that Bluebox was able to offer. They showed an intimate knowledge of a deal cycle, managed a tight auction process and were highly communicative from the start. I would happily recommend Paul and his team to business owners contemplating a sale of their business in the next 24 months. Experience is key and this has paid off for us.
Laurence Seward, Former Client
Aligning ourselves early with Bluebox, and entrusting the team to guide us through their process proved to be a highly rewarding investment from all viewpoints. Bluebox’s support significantly enhanced both the value of our business and its ‘saleability’. I would highly recommend Bluebox to business owners contemplating an exit in the next two years. The earlier the engagement the better so far as I am concerned.
Mike Minett, Former Client
We began working with Bluebox in early 2015 through their Blue Diamond Programme, as we were contemplating an exit. We found that the process focussed our minds on the key areas of growth in the business, and prepared us well for the inevitable rigours of due diligence. During the sale process itself, the advice offered by the Bluebox team was invaluable. We found them to be helpful, straightforward and honest.
David Stokes, Former Client
When selecting our adviser, it was extremely important that they had access to international buyers and were experienced in cross-border M&A. The team at Bluebox proved to be invaluable by identifying a strategic acquirer from America who was not known to us and by negotiating an excellent deal for all parties. I was also impressed with the process management from Bluebox, which ensured that the deal was closed in a timely fashion.
Jeff Weinstein, Former Client
When I first engaged with Bluebox, I was hesitant as to the benefits of using an advisor to firstly, find a buyer for my business and secondly, to get a deal over the line. However, now that the deal has completed with KPM, I can honestly say that the finer negotiation points handled by Bluebox and their overall management of this process has been nothing short of first class. I would be delighted to recommend Bluebox’s services to any entrepreneur contemplating the sale of their business.
Bill Ballard, Former Client
Bluebox worked closely with us over the following six months and helped us to implement some key initiatives which made InferMed a more attractive acquisition target. Once we decided to sell the business, the Bluebox team were very diligent in ensuring that no stone was left unturned. They negotiated expertly on our behalf to ensure we got the best deal possible.
Alan Montgomery, Former Client
The pre-sale planning programme that we signed up for with Bluebox made us develop our strategies and focus on the bigger picture. It proved to be a very rewarding investment from all viewpoints and significantly enhanced both the value of our business and its ‘saleability’. I would highly recommend Bluebox to business owners contemplating an exit in the next two years.
Nigel Parsons, Former Client
I have experienced first hand the value that can be created through highly structured pre-sale planning. It amazes me that it is not something that everyone does. It is so disappointing to see around 90% of transactions collapse before they complete and pre-sale planning will not only enhance your price, but also significantly enhance your chance of a closed deal.
James Caan, Investor
We worked incredibly closely with our advisers who provided expert knowledge of the sale process with which we were not familiar. We were truly delighted with the results.
Marten Nielson, Former Client
We appointed advisers to manage the sales process after we had received a number of unsolicited approaches for the business. I was incredibly impressed by the immense value that could be created by expertly negotiating with a group of already interested parties.
Paul Duckworth, Former Client
I was delighted with the service that the team offered and their real attention to detail. The deal was not without its complexities and it was reassuring to have such experienced advisers assisting me throughout the negotiations.
Peter Bennett, Former Client
Truly delighted with the way my sale process was managed. The fact that the team I worked with achieved such a great multiple is testament to their experience and their ability to create some true competitive tension.
James Averdieck, Gü, Former Client
The team at Bluebox provided invaluable support in negotiating this complex transaction. Their access to international purchasers, and exceptional knowledge of cross border M&A ensured that the deal was concluded efficiently, achieving a highly successful outcome for us all.
Jon Parslow, Former Client
“We selected Bluebox after a fairly long round of evaluating potential advisors because of their scientific, yet challenging approach to maximising value. During our initial meetings they showed us how far short of “ready” we were and consequently we completed more preparation in the early stages which meant we were equipped for what was to come. We were delighted with our choice of Corporate Finance partner. I do not hesitate in recommending Bluebox for any SME to consider.”
Simon English, Former Client
Bluebox provided invaluable advice in managing the negotiations with incoming investors. Their skills in handling these discussions were evident from the outset and the vital interface that they provided between the incumbent team and the incoming investors was truly beneficial.
Henry Braham, Former Client
Bluebox have a professional, dynamic and experienced team that is greatly assisting me with my focus on my exit within the next 24 months. Their structured approach is very refreshing and their ‘Blue Diamond’ programme is adding immense value.
Matt Evans, Former Client
The team at Bluebox provided me with a seamless service from the start of the engagement until our deal was completed. Attention to detail was commendable and their understanding of corporate M&A very impressive. I could not recommend them highly enough.
Victor Lewis, Former client
Having tried to sell my business previously – and failed – I was only too aware of the importance of pre-sale planning. This is a talented team offering a service that most people find out about, but too late.
Simon Hulme, Former Client
Bluebox are a quality outfit. Their access to International acquirers and relationships with the highest quality domestic investors was impressive. My shareholders and I received excellent service from start to finish and it was refreshing to be dealing with a senior team throughout the sale exercise.
Michael Clapper, Former Client
I cannot recommend the team at Bluebox highly enough. Their expert guidance throughout the entire sale exercise resulted in my shareholders securing an excellent deal with which the entire team was delighted.
Mark Rodol, Former Client
I’m really pleased with the service Bluebox provided. The team demonstrated excellent knowledge of the process to follow and led negotiations for the hospital in a way that allowed us to ensure we received appropriate value whilst focusing on reputational risk. Communication and service were of a very high standard.
Steven Davies, Former Client
With Bluebox’s expert advice we were able to find the right buyer that will benefit our business strategically. We’re delighted with the outcome and look forward to starting our new chapter
Clive Hillier, Former Client
The advice offered by the Bluebox team throughout the process was invaluable to the shareholders. We strongly believe that participating in Bluebox’s pre-sale planning programme was a significant driver behind the success of the deal. Their project management and negotiation skills throughout the sale process itself resulted in an exceptional deal being delivered to all parties involved.
Harpal Singh, Former Client