ONS Edition 3

Article: Private Equity Acquisitions of Accounting Firms: A Double-Edged Sword? (FEI Daily, 12/09/2024)

Article Summary: There has been a dramatic change in the auditing industry in the United States because of private equity (PE) investments in public accounting firms. This trend has the potential to herald a new age of progress and modernity, bringing in funds for innovations like AI in audits. Operating efficiencies, like a concentration on value-added operations and a centralization of audit tasks, are also offered by PE investments. Private equity businesses are defended by those who believe they offer discipline and strategic focus that are lacking in more conventional accounting firms. Because it streamlines operations, produces economies of scale, and consolidates fragmented markets, investing in accounting firms is a very appealing possibility for private equity investors. Private equity firms have swiftly expanded their advising capabilities by capitalizing on the stability and predictability of the accounting business, especially the auditing side. But detractors say the private equity model puts profits and returns first, which might mean less money for audit quality and incentives for activities that compromise auditor independence. Public confidence and auditor independence can be weakened by the interwoven structure of private equity ownership, which includes managing a diverse portfolio of enterprises across several sectors. Firms with private equity funding are frequently seen increasing consulting services through aggressive acquisition techniques, which critics say has led to a lack of major investment in audit quality. An alternative to traditional capital markets exists for audit companies looking for funding, but there is a risk that these markets will have an impact on the priorities and governance of the firm. Concerns regarding the increasing role of private equity have been voiced by regulators like the U.S. Public Company Accounting Oversight Board (PCAOB). The Financial Reporting Council (FRC) of the United Kingdom has taken preventative actions to guard against financial engineering and maintain audit quality for the benefit of the public. Executives in charge of finances and accounting must consider the pros and cons of collaborating with audit companies funded by private equity (PE) investors before deciding whether to do business with such businesses. Firms and regulators must strike a balance between innovation and the unyielding demand for audit quality if private equity investments are to continue.

Article: OCS solidifies its position with strategic acquisitions. (Scottish Business News, 09th December 2024)

Article Summary: Forth Holdings Limited was a prominent UK provider of Hard Services, and it has been acquired by OCS, a world leader in facilities management, along with FES Support Services and FES FM. The acquisition will increase OCS's Hard Services division's size by twofold, resulting in a merged firm with more than ￡600 million in yearly revenues and more than four thousand engineers. As evidence of its dedication to strategic growth and operational excellence, OCS has made five acquisitions in the United Kingdom in the past year, including this deal. The Scottish-based FES FM and FES Support Services have been providing first-rate assistance to public and private organizations since their 1999 inception. The merger will enable the continuation of more than 500 live apprenticeships around the United Kingdom, demonstrating the companies' shared goal of providing social value through the development of talent and the provision of opportunities for individuals to succeed. Paul Lowe, CEO of Forth Holdings Limited, and Daniel Dickson, CEO of OCS, are both optimistic about the companies' future growth and the quality of service they will provide to clients. To take advantage of growth prospects in industries including energy and technology, OCS's Hard Services division will integrate FES Support Services and FES FM.

Article: FIS nears capital markets acquisition (Payments Dive, 09th December 2024)

Article Summary: The capital markets division of Fidelity National Information Services (FIS) is about to conclude an acquisition. This division serves asset managers, brokerage companies, and insurers with treasury, lending, and risk management services, among others. Following FIS's sale of its Worldpay merchant services business to private equity company GTCR, the division is the smaller of two segments. When looking at revenue, FIS's banking solutions company comes out on top. This division sells software to banks and other financial institutions to handle client account services including processing payments, deposits, and loans. As the company readjusts to life after spinning off its Worldpay division, FIS is facing cost headwinds from the temporary layoffs that came with the spin-off. In the current year, the business anticipates a $280 million drop in operating expenses, followed by a $190 million drop in 2019 and a $165 million drop in 2020. Leading the charge for expansion is FIS, which is putting a lot of money into creating digital goods and payment services to package the selling of these services and increase income.

Article: Canopy Growth and Acreage Confirm Canopy USA's Completed Acquisition of Acreage (PR Newswire, 09th December 2024)

Article Summary: Acreage, a prominent U.S. cannabis corporation focused on brands, was acquired by Canopy USA. The acquisition, along with Wana Wellness, The CIMA Group, and Mountain High Products, LLC, as well as about 77% of Lemurian, Inc.'s shares, will allow Canopy USA to achieve its financial goals. These goals include increasing revenue, cutting costs, improving marketing, and having joint sales advantages in important cannabis product categories like flower, edibles, and vapes. With a potential value of up to US$50 billion in 2021, the world's largest and fastest-growing cannabis market is the target of Canopy USA's ambition to rapidly expand into the industry. Among the company's holdings are some of the most recognizable and iconic American cannabis brands, all of which are well-positioned in the most rapidly expanding markets for edibles, vapes, and flower. Canopy USA plans to expand rapidly in important U.S. states by combining the finest features of each brand. Canopy USA anticipates financial and operational benefits from the merger of its U.S. cannabis assets, including cost synergies and increased revenue, through the integration of Acreage's public company reporting costs and the brands, distribution channels, and operations present throughout the entire U.S. cannabis ecosystem. After the Acreage Acquisition is finalized, Canopy Growth plans to start highlighting the value of Canopy USA's U.S. THC assets to investors. Under the current tax receivable bonus plans of an Acreage subsidiary, Canopy Growth has committed to paying out around $19.5 million in Canopy Shares to a qualified participant. To pay off an existing put liability, Canopy Growth issued 1,315,553 Canopy Shares and 1,197,658 common share purchase warrants to specific Acreage securityholders. To save money on public company reporting costs, Acreage and Canopy USA are planning to apply to stop being reporting issuers in Canada. The delisting of Acreage shares from the Canadian Securities Exchange is expected to take place on or around December 9, 2024. Registered Acreage shareholders have received a letter of transmittal regarding the Fixed Share Acquisition and the Floating Share Acquisition. Send your certificate(s) representing your Acreage Fixed Shares and/or Acreage Floating Shares along with a completed letter of transmittal to Odyssey Trust Company, Canopy Growth's transfer agent. This is required of all registered Acreage shareholders with physical certificates. With a mission to "unleash the power of cannabis to improve lives," Canopy Growth has become a global leader in the cannabis industry. Doja, 7ACRES, Tweed, and Deep Space are just a few of the premium and mainstream cannabis brands that the company offers. They also have revolutionary vape technology from Germany's Storz & Bickel. Canopy Growth has also set up a whole ecosystem to take advantage of the prospects in the US THC market via its non-controlling, unconsolidated stake in Canopy USA. With its nationwide retail shop brand, The Botanist, Acreage has cannabis growing and retail facilities in multiple states across the US. Building and scaling operations to produce a branded experience that is seamless and focused on consumers is the company's main goal. The information and forward-looking statements included in this news release are subject to known and unknown risks, uncertainties, and other factors that could cause a significant difference between Acreage's actual performance, results, or accomplishments and those projected or implied. The following are examples of statements that involve uncertainties: the size of the U.S. cannabis market, Canopy Growth's ability to implement its strategies, Canopy USA's potential success, when Acreage shares will be delisted from the Canadian Securities Exchange, whether Canopy USA will file an early warning report on Acreage's SEDAR+ profile, and other economic, business, and competitive factors’ expectations. Events, outcomes, performance, prospects, and opportunities may vary significantly from what is stated or implied in forward-looking statements or information due to risks, uncertainties, and other factors. There is no guarantee that the events mentioned will happen within the specified time frames or at all, even though Canopy Growth and Acreage think the assumptions and factors used to prepare the forward-looking information or statements are reasonable. Therefore, you shouldn't put too much stock in them.