The Arctic ice cap may have collapsed at an unprecedented rate this summer, but here in the
Over the past two decades,
Jonathan Brown, head of corporate finance at Landsbanki, sees the dynamic nature of Icelandic corporate culture as another contributing factor to the country’s strong economic growth. He says: “In many ways, Icelanders are instinctive when it comes to investment banking. They have a creative, fast-moving and entrepreneurial culture.”
This dynamism is clear-cut in the large and diverse international investments made by Icelandic firms, such as Baugur and FL Group in the retail, banking, and airline sectors, amongst others.
“Landsbanki has grown rapidly over the last seven years on the back of an extremely strong economy and has now begun to expand aggressively internationally,” says Brown.
In 2005 Landsbanki’s strengthened its presence in the
The deal was funded by 10 per cent cash and 90 per cent new issued Landsbanki shares. Landsbanki paid 125p a share for Bridgewell, 15p less than when it floated on AIM in 2006. Landsbanki has estimated that restructuring and transaction costs of the Bridgewell deal will come to around £10 million.
Owing to a number of deals that failed to complete and weaknesses in AIM share prices in the summer of 2006, Bridgewell’s profits fell from £3.4 million to £1 million. However, Brown doesn’t see Bridgewell as a high-risk acquisition: “The deal takes us into a space with larger companies than Teather & Greenwood historically worked with and broadens our M&A capabilities. From now on, we expect more of our deals to range from £100 million to £1 billion.”
In addition, the quality of Bridgewell’s client list, which includes UK Coal, Aberdeen Asset Management and Gcap Media, will strengthen the bank’s base for organic growth in its corporate and investment banking activities. “The combined businesses make Landsbanki Securities one of the largest brokers in the small and mid-cap sector,” he claims.
Brown continues: “If you look at the larger end of the market, the majority of investment banks and securities houses are integrated – they can do M&A, equity and debt. Typically few M&A boutiques and corporate broking houses have any sort of financing capability, so this gives us a big advantage over our competitors. We can offer clients informed, objective advice over a wide range of issues because we have no specific axe to grind. Until now this has only been available to larger clients.”
The starting gun for Landsbanki’s European expansion fired in 2005, when Landsbanki made a series of acquisitions: Teather & Greenwood in
The bank now operates in 16 countries. Brown said: “The acquisitions made over the last three years are aimed at building an integrated investment bank around the small and mid-cap sector of the market. We are building a business that can operate cross-border but at the same time is immersed in the local cultures in which it operates.”
More mid-cap deals
Brown promises more mid-cap deals, offering greater growth prospects for Landsbanki. One such deal was Landsbanki’s advisory role this year advising a consortium of Duke Street Capital, Europa Capital and Bank of Scotland in the recommended public offer for CI Traders (CIT), a retail and property group in the
Landsbanki identified CIT as a potential target as a result of its strong market share in the
• It’s GDP per capita is among the highest in the world. GDP has grown by 50 per cent in real terms in the last ten years
• It is the smallest economy in the world to have its own currency
• While fish still makes up a large proportion of exports, it now accounts for less than ten per cent of gross domestic product.