West Midlands corporate deals review in association with Clearwater International

By Gareth Iley, partner at Clearwater International

LAST month saw a total of 33 deals in the Midlands, a significant increase on June’s total. It was the highest figure for six months, suggesting that there is the attitude of keeping calm and carrying on despite the uncertainties surrounding the impact of Brexit. 

 

Industrial and chemicals deals made up more than 40% of total activity this month, demonstrating that manufacturing within the region is still one of its key strengths.

Midlands-based manufacturers across the region both looked to expand and attract investment and new owners. Two Midlands based heating and ventilation businesses Jet Environmental Systems and Jet AHU were acquired by Kent air conditioning business Wozair. The acquisition will give both firms access to Wozair’s international client base and the management teams will remain in place.

On the other side of the coin, the biggest deal of the month goes to Warwickshire-based Melrose Industries which acquired American manufacturer Nortek Inc. Melrose specialises in buying and improving underperforming manufacturing businesses and has big ambitions to strengthen Nortek’s performance.

Shirley-based engineering company Hill & Smith acquired Technocover which develops, manufactures and installs high security products. It was the group’s second acquisition in the last three months as it looks to roll out an expansion programme. 

Wolverhampton Wanderers fans have endured a turbulent few years, witnessing back to back relegations, before being promoted back to the Championship last season. The club was acquired by Chinese investment firm Fosun International, with previous owner Steve Morgan departing the club. Fosun have reportedly made a commitment to invest between £20-30m in the club, which many fans hope will propel the club back up to the financial riches of the Premier League. The deal comes hot on the heels of Aston Villa’s investment from a Chinese conglomerate two months ago.

This month saw two big healthcare deals within the region. Oldbury-based online pharmacy business ChemistDirect.co.uk merged with Leeds based Pharmacy2u in a deal worth around £40m. Chief Executive Mark Livingstone of ChemistDirect.co.uk will take control of the new group, as it looks to shake up the pharmacy market. The deal was supported by £10m worth of financing by the BGF. Pharmacy2U has opened a £3.5m dispensing hub in Leeds this year, the first of its kind in the UK which is capable of dispensing over a million prescription items a month.

Birmingham headquartered cosmetic surgery group, The Hospital Group was acquired by the Aurelius Group.  The Hospital Group owns 15 clinics across the UK and employs over 300 people. German based Aurelius also owns UK based Transform Cosmetic Surgery the largest operator in the UK and it sees significant synergies between the two groups.

Midlands businesses continued to be attractive propositions to private equity owners. One of the largest deals in the Midlands this month was Palatine’s £21m investment in residential housebuilder Westleigh. The Leicestershire based group focuses on delivering affordable homes to registered providers. Westleigh were advised by Clearwater International and will look to use the investment to promote further growth in the company. The deal goes against the tide of uncertainty surrounding the future of the UK construction industry.

Elsewhere, BGF invested a further £4m in bathroom retailer Better Bathrooms, building on its previous £10m investment. The business has doubled its revenue in three years to £60m and is looking to reach the £100m turnover mark by 2018. It is hoped the investment will create a further 100 jobs across the region.