2016 corporate deals review in association with Clearwater International
TheBusinessDesk.com recorded a total of 30 deals in November. This was an increase on October’s figure of 28 but a drop compared with the same period last year, where the Midlands recorded 46.
As the Midlands gets festive and we build up towards the excitement of Christmas, it is worth reflecting that 2016 has been a sparkling year for Midlands based M&A.
In January, the Grand Central development in New Street Station was sold to property investment firm and Bull Ring owner Hammerson for £335m. The transaction raised some much-needed income for Birmingham City Council and should ensure continued investment in the development of Grand Central.
As the percentage of online Christmas purchases grows ever higher, it is worth considering the complex networks that make deliveries possible. In March, LDC Birmingham, backed the secondary buyout of CitySprint, a same-day distribution company. The firm has subsequently created a new technology ‘hothouse’ division to focus on innovation and improving its delivery platform infrastructure.
Going against the tide of concerns post Brexit about the future of the UK construction industry, Leicester, based housebuilder Westleigh received a £21m investment from private equity firm Palatine in July. Westleigh was advised by Clearwater International and will look to use the investment to achieve further growth.
2016 was a bumper year for Chinese investment in Midlands football clubs. Multi-millionaire businessman Dr Tony Xia purchased Aston Villa, investment firm Fosun acquired Wolverhampton Wanderers and investment group Yunyi Guokai (Shanghai) Sports Development bought West Bromwich Albion. All three clubs will hope post investment, for a good run of results over the tough Christmas period and some interesting new signings when the January transfer window opens.
Industrials and chemicals remained a strong segment in the Midlands, with several cross-border deals. Most notably in May when paint brush manufacturer, Bromsgrove-based LG Harris was acquired by multi-billion pound Norwegian group Orkla for £55m. Orkla acquired the business to expand its profile in the UK DIY sector.
On the other side of the coin, Warwickshire-based Melrose Industries acquired American manufacturer Nortek Inc. Melrose specialises in buying underperforming manufacturing businesses and has big turnaround plans for the group.
Food was the order of the day for two of the largest transactions in 2016. Warwickshire-based food procurement provider PSL was acquired by facilities management specialist Sodexo, in a deal advised by Clearwater International.
Equally Midlands-based crisp manufacturer Tyrells was acquired for £300m by US food producer Amplify Snacks. The company is currently the second largest player in the snack food market and will use the investment to continue its impressive growth trajectory.
August saw two of the biggest healthcare transactions of the year. Oldbury-based pharmacy business Chemistdirect.co.uk merged with Leeds based Pharmacy2u in a £40m deal backed by private equity investor BGF. The combined group is looking to become a real disruptor in the online pharmaceutical market.
Equally Birmingham headquartered cosmetic surgery group The Hospital Group, that owns 15 clinics across the UK, was acquired by Germany’s Aurelius Group. Aurelius already owns UK Transform Cosmetic Surgery and it sees significant synergies between the groups.
2017 will be an exciting year for Midlands-based businesses who underwent investment and gained new owners in 2016. They will look to adapt to new ownership and try and execute growth and expansion strategies. It will be interesting to see who the beneficiaries will be in 2017.
