Run of deals worth £80m signals healthy market, says KPMG

KPMG’s corporate finance team in the North West says the local market remains in good health, reflected by a run of deals in the last month valued at around £80m.

The team, led by partner Jonathan Boyers, kick-started a flurry of transactions in mid-November advising LDC on its buyout of Eque2 and completed their run of form advising the owners of Lakelovers on its sale in a management buyout backed by LDC.

The deals were:

Advising LDC on its buyout of construction ERP software business, Eque2;
Advising the shareholders of Giacom Holdings on the sale of the business to Livingbridge;
Advising Synergy Health Healthcare Consumable Solutions (HCS) on its sale to Vernacare;
Advising the owners of Lakelovers on its sale in a management buyout backed by LDC.

This brings the total number of deals advised on by the KPMG team across the North over 2017 to 15 with a combined value of £1.15bn.

Other North West highlights of the year include advising the shareholders of Utiligroup Holdings on the sale of the business to Energy Services Group and acting as lead advisor to the shareholders of Biocomposites (UK) on the sale of the company to TA Associates.

Jonathan Boyers, head of KPMG’s corporate finance team in the North and head of the firm’s UK M&A practice, said: “Although there has been a lot of talk of the gathering headwinds facing the economy and Brexit-related uncertainty, the local deals market remains in good health, buoyed by an unceasing demand for high quality businesses from both trade buyers and private equity, with buyers willing to pay very high multiples.

“Strategic buyers continue to hunt for businesses with a track record in making solid profits, have good prospects that are backed up by a robust plan and model, and are being led by a quality management team. And, as we’ve seen over the course of the year, there is particular interest in those businesses using cutting edge technology to disrupt a market.

“What has been particularly pleasing from our point of view is the range and scope of our activity throughout the year, working with founders to realise their exit, with private equity to both buy and sell businesses, and across a range of sizes and sectors – our deals have ranged from £3m to £300m. ”

Looking ahead, Boyers says he expects confidence to be tested as margins are squeezed by inflation, rising input costs and softening consumer spending.

“However, we know that businesses are still considering both private equity, trade and IPOs when exploring a prospective fundraising option or exit route.  We are seeing business owners seeking to raise funds for growth or de-risk by selling in full or in part, and the funding available for deals currently remains very strong, so we certainly don’t expect transaction activity to tail off in the short to medium term.”