West Midlands corporate deals review in association with Clearwater International
Clearwater International partner Gareth Iley looks at the continuing influx of foreign investment
In 2016 foreign firms spent £187.4bn buying British companies – a record high – and despite claims that there has been a sharp fall in foreign takeovers this year, the Midlands saw three in June alone.
Deals from foreign firms prove that Britain is still a hugely attractive hub for global investment; as time goes on we await to see the impact of Brexit on longer-term investment. The continual fall in the sterling over the last year is aiding foreign investment, making British firms appear relatively cheaper.
One in four large UK businesses are now foreign owned including the likes of Weetabix, Boots, Asda, and Cadbury.
Holland & Barrett acquired by L1 Retail
L1 Retail, an investment fund run by Russian billionaire Mikhail Fridman, agreed to acquire Nuneaton-headquartered Holland & Barrett (H&B) from parent company Nature’s Bounty, owned by The Carlyle Group, in a deal worth £1.77bn – by far the largest in the Midlands this year.
The health food chain, founded in 1870, has experienced 32 consecutive quarters of like-for-like growth, a true testament to the company given the number of struggling high street retailers at the moment.
A significant rapidly expanding online presence and continued international growth driven by partnerships with Tesco in the UK, Apollo Hospital Group in India, and AS Watsons in Hong Kong, has helped increase H&B’s footprint to 16 countries and 1,300 stores, making it an attractive target.
Demand for wellness products is higher than ever, driven by more health conscious consumers and higher levels of work place stress and exhaustion in the digital age.
Uni-Select acquires The Parts Alliance
Listed Canadian automotive aftermarket parts business Uni-Select, agreed to spend £205m on the purchase Solihull-based The Parts Alliance – its third acquisition this year, but it’s first in the UK.
The Parts Alliance, which has been owned by private equity firm HgCapital since 2012, has grown rapidly in recent years, through a series of 10 acquisitions, to become the second largest player in the UK automotive aftermarket parts market, with an approximate 7% share.
The acquisition provides the £1bn turnover firm with entry to a new geographic market – a market worth around £4bn (the fourth largest in Europe) and one currently ripe for consolidation given its fragmented nature. Growth in the market is also expected to continue driven mainly by the aging of the car population.
Dunlop Aircraft Tyres bought by Liberty Hall
US aerospace and defence focused private equity firm, Liberty Hall Capital Partners, snapped up well know Birmingham-based tyre manufacturer, Dunlop Aircraft Tyres, in a deal valued at £105m. The acquisition marked an exit for AAC Capital Partners who backed the management buyout of Dunlop in 2007.
The globally recognised, heritage brand, which was founded in 1910, designs, manufactures and retreads aircraft tyres through 3 facilities located in the UK, the US and China. Products can be found on more than 150 commercial, regional and military aircrafts, serving more than 300 customers, including airline operators, across more than 85 countries.
The global aircraft tyre market is expected to grow at a CAGR of 5% over the next 5 years, and Dunlop, being one of the five major manufacturers, is well placed to take advantage of this.
The transaction marked Liberty Hall’s fourth platform investment, it’s second in the UK and it’s second in Birmingham as well, following the acquisition of aerospace components manufacturer Bromford Industries in March 2016.
