The M&A Dating Game IV: A Country Where Phone Numbers Are Only Four Digits Long
This is the fourth 'The M&A Dating Game' series article which focuses on M&A opportunities on an island with a gross domestic product of ~$31M.
24 July 2014
This is the fourth article in a series about countries that haven't announced an M&A event in the past 20 years. In my opinion, there’s so much these less-known countries have to offer that it’s a shame they’re being left out. Therefore, I have decided to take it upon myself to drum up some business for them.
The last time, I left you with the hint that this country “housed Napoleon during his exile the last six years of his life.” Here are a few more hints about the country, to see if you can narrow it down before the big reveal.
- It is in the middle of nowhere — no, seriously — it’s 1,200 miles from the nearest continental landmass
- It was uninhabited until the Portuguese discovered it in the early 1500s
- It is named after Saint Helena of Constantinople
That last hint is a gimme. If you haven’t figured it out yet, today’s country is ...
Where on earth is this place?! Yeah, like I said before, it’s really in the middle of nowhere.
St. Helena is a British Overseas Territory, much like Bermuda — one of the oldest countries under British rule. Originally discovered in the early 1500s by the Portuguese, the island has since changed hands several times. In the past, it was largely used as a prison for Napoleon and other enemies of the British crown, and was a stopping point for sailboats traversing the Atlantic Ocean. Today, less than 5,000 people live there full-time, and the gross domestic product is approximately $31 million (financial assistance from the United Kingdom makes up a huge chunk of that).
The country actually has a pretty interesting history, which I won’t get into, but do recommend as a quick read if you’re interested.
St. Helena’s economy has been in decline basically since steam engines were put on boats (meaning that sailors didn’t need to stop there on an ocean journey). Suffice it to say, the country’s economy could be doing better.
Opportunities for M&A
Believe it or not, there are at least three decent M&A opportunities here. I was surprised myself.
- Booze — St. Helena is famous (I use the term very loosely) for a type of alcohol called TUNGI Cactus Pear Spirit. It’s made out of the prickly pear cactus and comes in an awesome bottle. St. Helena Distillery, which makes this, also makes two other liquors: Rum and Coffee Liqueur, both of which come in equally cool bottles. With today’s popularity of unique and exotic drinks (I’m thinking Pisco, for example), this is a chance to bring something different to the table.
- Transportation — Another big opportunity here is transportation. Consider the following: In 2010, the British government decided to build an airport in St. Helena — the first one on the island — since the only way to get there for the past 500 years was by taking a five-day boat trip. The airport is currently under construction by Basil Read, a South African construction company, and will be completed by 2016. The airport will be large enough to accommodate flights directly from Africa and Europe, and hopes to kickstart a fledgling tourism industry. Anyone want to buy an airport?
- Tourism — My final idea (and this seems to pop up over and over again), is tourism. With an airport currently under construction, now would be the time to buy the three hotels on the island. Tourism hasn’t been particularly strong here, The two largest draws being firstly, that Napoleon lived in St. Helena for six years; and secondly, that the island has a staircase made of 699 steps carved into a mountain. Yes, I’m serious — it really is an exciting place. So valuations would surely be cheap, and could be poised to rise with the completion of the airport. All in all, this is the perfect opportunity for a budding hospitality entrepreneur to start an empire.
Now, for next edition’s hint. If this Northwest African country were a U.S. state, it would be the 9th largest by area, but the smallest by population. See you next time!
Ronen is a Senior Associate in Strategy and Product Marketing at Intralinks where he helps shape the direction and marketing of Intralinks Dealspace and DealNexus for the M&A community. Prior to joining Intralinks, Ronen was a management and strategy consultant for several years. Ronen has also worked in the financial sector, specifically in the venture capital and private equity fields. He graduated from New York University’s Stern School of Business with a dual degree in Economics and International Business, with a specialization in Entrepreneurship.