Region still banging the drum despite a quiet month for deals

Gareth Iley, partner at Clearwater International

By Gareth Iley, partner at Clearwater International

What a weekend that was! A fantastic royal wedding, an FA cup final, and wall to wall sunshine! As Prince Harry and Meghan Markle tied the knot at Windsor Castle, millions watched in awe of the Bride’s wedding gown – designed by West-Midlands-born, Givenchy Artistic Director, Clare Waight Keller.

But this coming weekend is going to be even bigger, when at 5pm Aston Villa take on Fulham in the Championship play off final. Will the mighty second city, enjoying a current boom in development and manufacturing prowess, be able to “do one” over London, and match Wolverhampton by returning a club to the premier league!

In amongst all this excitement and sunny weather, in the world of M&A April was a significantly quieter month. The Business Desk recorded only 11 transactions in April – this has fallen every month since January when 32 deals were recorded and compares to 21 transactions in April 2017. However, whilst deal volumes are down, trade and PE are continuing to show their keenness for acquiring strong Midlands-based companies.

Don’t panic – one month is not enough to determine a trend and as we examine our own deal flow and discuss market sentiment, we are still confident in a good year for deals, and the Midlands continues to attract significant investment with some notable investment made in the region.

Private equity firm NorthEdge Capital continued to show its interest in the Midlands, backing the MBO of Stoke-on-Trent headquartered Prohire, a provider of commercial fleet management solutions. Northedge will continue to support Prohire’s buy-and-build strategy after Prohire completed its first acquisition in December 2016, which increased its fleet to around 3,500 units and turnover to £40m.

LDC backed the management team at Precision Micro as they undertook a £22.5m MBO from Meggitt plc. Precision Micro makes over 50m high precision metal components each year, manufactured using photo-chemical etching. This highly technical process once again demonstrates the Midlands manufacturing expertise.

As well as private equity, banks and debt funds continue to support the region. In April Merdian Metal Trading, the steel stockholder benefitted from new debt facilities of £35m, provided by Secure Trust Bank. Midlands-headquartered Rotala, the operator of bus and coach operations, secured new funds from HSBC to support its acquisitions plans.

Midlands corporates continue to invest, another important sign of confidence. Leicestershire-based Breedon Group acquired mini mix concrete operator, Staffs Concrete. The Stoke-on-Trent-based company operates a fleet of eight mixer trucks and two concrete pumps, specialising in delivering small loads of ready-mixed concrete and screeds, to commercial and domestic customers.

So let’s hope deal volumes bounce back in May and we can all celebrate the return to the premier league of Aston Villa – come on Brucie, you’ll make one of my boys very happy if you do!

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