Corsair Capital and Palamon Capital Partners to acquire foreign exchange and international payment solutions provider Currencies Direct

Palamon Capital Partners, a pan-European growth investor, and Corsair Capital, a leading private equity investor in global financial services, today announced an agreement to jointly acquire control of Currencies Direct (“The Company”), a leading specialist provider of foreign exchange (“FX”) and international payment solutions to private and corporate clients. The transaction value exceeds £200 million.

The acquisition is structured so that Currencies Direct management will increase its ownership position in the company and will also include continuing equity participation by the firm’s principal founder, Mayank B Patel OBE, who will become Honorary President.

Currencies Direct’s Private FX segment provides foreign exchange services to more than 150,000 registered retail clients. Its Corporate FX segment offers foreign exchange services to small medium enterprise (“SME”) clients for import / export-related activities across a variety of industries, including the e-commerce segment. The Company distributes its products and services through a multi-channel distribution network, which includes a strong network of affiliate partnerships. Currencies Direct has established market presences in the UK, Continental Europe, Australia, South Africa and the US, and is well positioned to continue to expand internationally. The retail and SME FX market is worth over £3 billion in the UK alone.

The specialist segment of the foreign exchange services industry is expected to grow around twice as fast as the average for the overall industry, as retail and SME customers continue to shift away from banks for their foreign exchange needs.  With its superior high touch customer service and competitive pricing, Currencies Direct is well positioned to continue to benefit from this long-term industry trend.

Keith Hatton, Chief Executive of Currencies Direct, stated, “We are excited at the prospects of working with Palamon and Corsair Capital which have demonstrated their expertise in the financial services sector. They are shareholders who underscore a strong vote of confidence in the future of our company and the strategy of the management team. Their acquisition of Currencies Direct provides our company with capital, experience and global relationships to accelerate our strategy to be a leader internationally in foreign exchange and payment processing.”

Daan Knottenbelt, Partner of Palamon Capital Partners, stated, “With its established market position, attractive margins, and exciting growth potential, Currencies Direct is a signature Palamon investment and in line with our core thematics.  As experienced growth investors in the consumer-facing financial services sector we look forward to partnering with the management team to provide strategic and financial support to take Currencies Direct to the next level.  Currencies Direct’s proven business model, powered by its proprietary affiliate network, positions the company ideally to capitalise further on its strong momentum in this fast growing, dynamic sector.”

Lord Davies of Abersoch, Chairman of Corsair Capital, stated, “We are extremely excited about Currencies Direct. The Company has a very knowledgeable and strong management team. As part of our ongoing review of the financial services industry’s trends and themes, we identified the specialist foreign exchange and international payments industry as a growth sector: banks tend to focus less on retail and SME customers in this area, and specialist players are therefore well-positioned to gain market share and grow significantly above the average industry growth rate.  Currencies Direct’s multi-channel distribution model, including its strong network of affiliates, is a key differentiator relative to other specialist international payment providers and banking competitors. Given Corsair Capital’s extensive network of relationships with financial services groups and other institutional partners, we are confident that we can provide value-add to Currencies Direct as it grows its business.”

Mayank B Patel OBE, comments, "I am proud of what Currencies Direct has achieved over the last 20 years and am confident that, given the strength of the management team and the value added expertise of Corsair Capital and Palamon Capital, the business will continue to take advantage of the growth prospects in the sector. I am delighted I will be part of Currencies Direct future as a shareholder and Honorary President."

The transaction is expected to close by the end of calendar year 2015 and is subject to applicable regulatory approvals and other conditions.

Oxford Capital exits Oxitec in US$160m deal

Pioneering insect control business sold to Intrexon Corporation, a major US biotechnology company

Oxford Capital has announced the sale of portfolio company Oxitec, a specialist insect control business to Intrexon Corporation, a US biotech business in a US$160mdeal.

Oxford Capital has been the most significant investor and has supported Oxitec from the time of its original spinout from the University of Oxford.  In 2014 it led the final pre-exit US$10 million funding round for the business, which was supported by existing shareholders, the University of Oxford and East Hill Management, as well as a number of international private capital investors from Latin America, Europe and Asia.

Intrexon is a biological engineering company, specialising in creating products in the health, food, energy and environment industries.  Oxitec's safe, innovative, self-limiting approach to controlling insects that are harmful to human populations and crops is well aligned with Intrexon's growth and investment strategies.

Ted Mott, Managing Partner, Oxford Capital said:

“This transaction lays a solid foundation for Oxitec’s future growth and has delivered a significant investment return to our investors.  Oxitec is making a real impact in the fields of disease control and agricultural crop protection. We are proud of the part we have played in the company’s development, and we look forward to following its continued success.”

David Mott, Managing Partner, Oxford Capital said:

“Oxitec is one of the most exciting companies in the world today and has developed a reputation as a pioneer. Our partnership with the team started with Dr Luke Alphey, Oxitec’s founder, when he was taking early steps towards commercialising his research. Since then, we have continued to work with Hadyn Parry, CEO, and the rest of the Oxitec team as they have created a business capable of deploying exciting technology to address global issues. We are delighted to see the acquisition by Intrexon following the successful growth of the company.”

Hadyn Parry, Chief Executive Officer of Oxitec said:

“I am hugely appreciative of the leadership and support Oxford Capital has given Oxitec throughout its development.  One of Oxitec’s strongest assets around the board table was the conviction and support from the Oxford Capital team. We are excited to be joining forces with Intrexon and see this partnership as key to developing sustainable solutions to some of the world's most intractable health and agriculture problems and making them available on a global basis.”

Dr Christopher Richards, Chairman, Oxitec said:

“Over the last ten years, Oxitec has developed original research from Oxford University into new and sustainable insect solutions which have the potential to tackle some of the most intractable problems in health and agriculture.  This has been achieved with the consistent, long term support of the current shareholders, including the founder Dr Luke Alphey of Oxford University.  We are confident that Oxitec will flourish as a UK-based company under Intrexon ownership.”

Randal J. Kirk, Intrexon Chairman and Chief Executive Office said:

“Oxitec’s technology demonstrates that engineered biology can solve some of mankind’s most difficult problems – many that have eluded solutions for a very long time – while exercising tremendous respect for the environment.”

Oxitec is commercialising technology to control pests and invasive species including mosquitos, which spread dengue fever and other diseases.  According to the World Health Organisation dengue infects up to 390 million people each year, and is a leading cause of serious illness and death among children in some Asian and Latin American countries.

Outdoor open release trials with Oxitec’s leading mosquito-based product which targets the dengue-carrying mosquito have been completed in Malaysia, Grand Cayman, Brazil and Panama. Trials in Grand Cayman, Brazil and Panama have all shown a greater than 90 per cent reduction in the local mosquito population.

In April 2014 the National Biosafety Committee in Brazil, gave their technical approval for commercial release of Oxitec’s mosquito-based product. It is the first genetically modified insect to be considered safe for use in Brazil.

Oxitec has also received approval for open field trials in Brazil and the USA to trial the company’s first two strains for agricultural insect-control of the Mediterranean fruit fly and the Diamondback moth. These are scheduled to start later in 2015.

Oxitec was named a World Economic Forum technology pioneer in 2008 and has been recognised by the Bill and Melinda Gates Foundation ‘Grand Challenges for Global Health Initiative’.

Advisers were:

Joe Pillman, Wilmer Hale, Legal adviser to Oxitec

Barry Maytum, Keystone Law, Legal adviser to Oxford Capital.

Magnolia Advisory, corporate advisers to Oxitec

Prudential recommended as a ‘buy’ as it beats forecasts and enjoys good growth

·         Prudential’s operating profits rose 17% following a surge in sales in Hong Kong

·         The group increased its interim dividend 10% to 12.3p

As Prudential reports its interim results Ian Forrest, investment research analyst at The Share Centre, explains what they mean for investors.

“This morning, Prudential’s interim results beat market expectations and showed that all of the insurance giant’s principal regions are enjoying good growth levels. Operating profits rose 17% to £1.88bn, with Hong Kong seeing a remarkable 84% surge in sales in the first half. Additionally, the company’s Eastspring fund management group, based in Asia, reported inflows of £4.6bn in the first half, taking its total assets to a record £85.3bn. This represents a 28% increase over last year, further demonstrating that the region remains the main driver of growth for the company. Investors should also acknowledge that the UK and US life businesses delivered healthy profit growth, whilst its investment group M&G saw operating profits increase 11%. Furthermore, current investors will be pleased to note that the interim dividend was lifted 10% to 12.3p.  

Prudential’s interim results mark a good start for the new chief executive, Mike Wells, who recently took over from Tidjane Thiam, after running the group’s North American business. Shares in the group have underperformed the market in recent weeks, but interested investors should remember that this follows several years of relative outperformance.

“We continue to recommend Prudential as a 'buy' for investors looking for a positive investment idea that spans a number of regions. The Asian growth story continues to remain highly attractive, along with strong UK and US operations.”