West Midlands corporate deals review in association with Clearwater International

Gareth Iley, partner, Clearwater Corporate Finance

By Gareth Iley, partner at Clearwater International

This month saw former John Lewis boss Andy Street elected Mayor of the West Midlands. It is hoped that the appointment of a local mayor twinned with greater devolution will prompt better spending decisions and greater investment in the region.

2016 was a record year for external investment in the UK TMT sector. Total venture capital and private equity funding hit £6.7bn. It is really positive to see that trend continuing in 2017 in the West Midlands.

NVM continued the spate of private equity exits in the telecoms segment, when it sold Coventry-based Optilan to Blue Water Energy. Under NVM, Optilan carried out an aggressive international expansion strategy opening offices in the Middle East, Azerbaijan, India and Turkey. Birmingham based IT support specialist Computerworld Business Solutions was also acquired by fellow Birmingham managed services provider Arden Group.

It is expected that over the next few years B2B growth in the telecommunications and IT service may exceed B2C growth for the first time ever, creating a particularly attractive segment for potential investors.

Few industries have received as much analyst hype as fintech. Yet the insurance industry has faced a shifting value chain, fierce levels of regulatory change and an increasing need to use modern and up to date technology. Software providers that can help address these challenges have become sought after assets.

Worcester insurance technology specialist Open GI acquired fellow insurance software specialist Transactor Global Solutions in a £40m deal. Transactor is headquartered in Winchester, with a development centre in Poland another example of Eastern Europe being increasingly popular for research and development. The acquisition aims to help Open GI become a more complete provider to the industry.

Outside of TMT, April saw two large food manufacturing sales to international acquirers. Malvern based Westbridge Food Group was acquired by Thai CPF Investment for £60m. Thai CPF acquired the business for access to new customers and import quota licenses for chicken products to the EU.

Equally Tenbury Wells cake confectionary supplier Orchard Valley Foods was acquired by Norwegian Orkla Food Ingredients. It is thought a weak pound, gives international acquirers the chance to pay 15-20% less for assets, offering a number of investment opportunities for domestic firms.

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