Friday, November 7, 2014

News: Manufacturing drives Yorkshire M&A activity

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Recent mergers and acquisitions in Yorkshire are being driven by pent up demand and the availability of cash according to to accountancy and business advisory firm BDO LLP.

BDO's latest PCPI/PEPI report, which tracks trade and private equity price patterns when purchasing private companies, found that trade deals jumped by 36% in Q3 2014. Similarly, the volume of private equity acquisitions increased by 32% to its highest level since 2009.

The biggest deal in Rotherham saw electronics retailer, Maplin, secure new investor owners after Montagu Private Equity announced that it has reached agreement to sell the company to Rutland Partners for £85m.

Recent activity saw One51 plc, the Irish owner of Rotherham-based manufacturer, MGB Plastics, conclude its takeover of Yorkshire firm, Straight plc. In September, Mac'Ants Abrasives, the supplier of abrasive material used in sandblasting and manufacturing, and based at Dinnington in Rotherham, was acquired by Sheffield's Samuel Hodge Group.

Earlier in the year, Rotherham-based Focus NDT, a recognised leader in Non-Destructive Testing (NDT) and inspection activities, was acquired by the US-based MISTRAS Group and Dinnington-based Northern Engineering (Sheffield) Ltd (NES), was acquired by American specialist private investment partnership, Industrial Growth Partners (IGP), as part of a deal for parent company, Sanders Industries.

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Jason Whitworth, M&A partner at BDO in Yorkshire, said: "Whilst we are seeing capital markets take a pause for breath, the appetite for deals in the private company arena are undiminished.

"The strength of manufacturing continues to drive activity in Yorkshire and Humber, with a third (31.7%) of all deals so far this year coming from this sector. We're also seeing mid-market transactions pick up the pace, with volumes increasing by almost 30% compared to the same period last year.

"Buyers are willing to pay good prices for these businesses too. Deal values in the mid-market have witnessed a significant rise of 51% in 2014 – much more than 17% increase reported for smaller-sized deals."

BDO LLP website

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