Hedge fund collapse paved the way for merger

THE collapse of a hedge fund last February looks to have paved the way for the move on Hiestand by IAWS.

Focus Capital, founded in early 2005 by US investor Tim O’Brien and his Swiss partner, Philippe Bubb, had generated strong returns until the end of last year.

It won a EuroHedge award after returning over 100% in 2006 to its investors.

But its mid cap investment portfolio of investments in Swiss companies fell sharply early in 2008 and it was forced by its two main backers to liquidate the fund, worth an estimated $1billion at one point.

By that time Hiestand’s share value was down 41.4% and the British equity fund, Lion Capital, snapped up the Hiestand stake which it has agreed to sell to IAWS for €30m cash and 12.7m new shares making the deal worth about 240m, to the British fund.

Now that the wheels are in motion the group is confident the new company will be listed by the end of August and the way cleared for substantial synergies between the two.

On the planned growth of double earnings in five years chief executive, Owen Killian, said the group will do it by acquisition and though strategic growth.

He declined to specify how much would be spent on takeovers in the future but noted that €1.3bn has already been shelled out since it targeted the par baked and convenience end of the food market.

He group has “successfully renegotiated financing facilities” for the enlarged group.

He stressed the change in IAWS’s make up would not interfere with the development of the valuable site which houses R&H Hall in Cork’s inner harbour.

Its future development effectively in the hands of Origin, which was spun out last year and is now a listed company on the ISEQ.

Its core activity is animal feeds, but Origin has indicated its commitment to the site, which will be developed as the plans for the area are finalised by local authorities in Cork. When finalised IAWS will relocate R&H Hall, a key part of its agri-nutrition operation to a new site. That could take up to five years.

It has resources to exploit the commercial potential of the Cork dock site however as its interim figures, showing operating profits up over 70% in its first interim results as a listed company, demonstrate.


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