Posted on Wednesday, 15 October 2014 15:26

Simon Denny: South Africa's Mergers & Acquisition star

By Jana Marais in Johannesburg

Simon Denny. Photo©All Rights ReservedHaving advised on some of South Africa's most high-profile deals, Denny predicts increased cross-border transactions with South Africa and eastern Europe.

It's been a busy year so far for Simon Denny. one of the rising stars in the merciless world of mergers and acquisitions (M&A), he has worked on some of the biggest and most high-profile deals in south africa since joining Deutsche Bank in 2008.

Faces oF Finance

Backed by a new generation of bankers, Africa's financial sector is fuelling the continent's exponential growth. Foreign investment continues to flow to African projects, but more than ever the focus is shifting, with the continent generating home-grown solutions to its challenges and shaping its own financial future.

Behind the scenes at African banks, law firms and companies, a quiet revolution is underway. The architects of this phenomenon are vanguard of finance professionals seeking to push the continent's rapid development and to channel the resources crucial to fund Africa's expansion.

It includes Simon Denny, one of South Africa's chief mergers and acquisitions experts, and Hafid El Fassy, a Moroccan banker battling to strengthen the ethical dimension of the financial sphere. Ghana's Joshua Siaw, too, is a rising star and at only 30 is heading the Africa division at a leading law firm.

There are thousands of such players across the continent, and these new faces of finance have several things in common, in addition to their vast business experience. They each have an international perspective and the ambition to shape a new self-sustaining Africa providing sophisticated financial solutions to build the continent of tomorrow. ●

Most recently, Denny advised south african leisure and gaming group Tsogo Sun when brewer SabMiller sold its 40% stake in the group in July for R10.6bn ($1bn).

He also worked with financial services group Alexander Forbes on the capital restructuring and exit of private equity shareholders including actis Capital, and advised pharmaceutical group Adcock Ingram on offers from CFR Pharmaceuticals and Bidvest.

Bidvest ended up victorious in the hostile battle for Adcock, after Adcock and CFR admitted in february that it would be impossible to receive 75% shareholder approval for the Chilean group's R12.8bn buyout offer.

A chartered accountant by training with a bachelor's degree in law, Denny spent a five-year stint in acquisition finance at standard bank before joining the German bank.

His work for Deutsche Bank has included advising Massmart Holdings on the acquisition of a 51% stake by Walmart, and Telkom Group on the strategic minority offer by South Korea's KT Corporation, which was eventually withdrawn after the South African government – a major shareholder in Telkom – vetoed the transaction.

The R16.5bn Walmart-Massmart deal, which was finalised in 2012 after a failed government attempt to have it blocked by the Competition tribunal, was a career highlight for denny.

"To have had the opportunity to work on such a high- profile, cross-border transaction, introducing one of the world's largest retailers into a strategic partnership with one of the leading south african retail companies was, from a career perspective, a great experience," he says.

As director in the investment banking, coverage and advisory team in Johannesburg, denny is responsible for strategic advisory (debt and equity) and cross-product coverage. Deutsche Bank's track record in M&A – it was recognised as the dealmaker of the decade in 2009 – and good client relationships help to convince prospective clients.

"At Deutsche bank, we focus on knowing our clients and understanding their priorities. We have developed trusted relationships over many years. Clients appreciate having bankers on the ground that know and understand the local environment, as well as the international connectivity that Deutsche Bank brings," Denny says.

While confidence generally remains weak, key developed market partners are recovering, which will be good for South Africa and M&A activity in general, Denny asserts.

"South Africa remains the key strategic market on the continent given its developed- world infrastructure, banking system and corporate governance. Inbound investment interest will remain and be significantly bolstered if there is an economic turnaround."

In May, the World Bank downgraded South Africa's growth forecast from 2.7% to 2%, saying tight monetary policy, "combined with labour strikes and weak electricity supply, will keep growth subdued".

China-to-Africa M&A look set to remain a mega trend, but there is also interest from other emerging markets such as Latin America and eastern Europe, Denny says.

Kevin Latter, head of corporate finance for Deutsche Bank South Africa, said Denny has an excellent technical and commercial understanding when it comes to complex, cross-border transactions.

"Not only does he have the IQ to lead on these highly complicated deals, Simon has the EQ when dealing with our clients on a personal level. He is client-centric in his approach, he is a team player and a true ambassador for Deutsche Bank," Latter said.

For Denny, there is little time to switch off. "Pressure and long hours will always be intertwined [in] an environment committed to excellence.

Corporate advisory, especially at an international investment bank, is a 24/7 job. Enjoying what you do, support from your team, family and friends, are important to overall success." ●

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