Yorkshire deals market review in association with Grant Thornton
The cold, stormy weather may be setting in but there’s no dampening of the mood in the deals arena, says Chris Archer, corporate finance director, Grant Thornton Leeds.
It’s one of the quirks of the market we are operating in that sectors that only a few years ago would perhaps not expect to be top performers often end up defying the odds.
Wander along any Yorkshire High Street in 2017 and you’re likely to only be a few steps away from a café. Be it a national chain, independent, Hipster or otherwise, our insatiable appetite for caffeine and conversation show no sign of letting up.
Allied to this, as stories about health risks from poor diet and lack of exercise continue to hit the headlines, the rise of the ‘healthy eater’ continues to gather pace.
This is being further reflected in the growth of establishments catering to this need. And for those with the right business model growth is very much on the agenda.
Given this background, it is perhaps no surprise that a notable September deal saw Leeds-headquartered restaurant and deli chain Filmore & Union secure a £3.5m investment to accelerate its site roll-out plans.
Filmore & Union, which operates 14 sites and recently opened a concession in John Lewis, will use the Business Growth Fund (BGF) funding to expand its portfolio across the North of England and the Midlands.
Created in 2012 by Adele Ashley from a single site in York, the business serves a menu of fresh and seasonal food and drinks using local produce to create breakfasts and lunches, as well as gluten-free cakes. Flimore has restaurants across Yorkshire including Ilkley, Harrogate, Beverley, Skipton and Wetherby, as well as food to go delis in Newcastle and York train stations.
Across the month, September was an interesting month for the Yorkshire market with a blend of 24 deals comprising development capital, M&A and equity capital markets.
There were five cross-border M&A deals including Fragrance’s (Singapore) £7m acquisition of the Crown Hotel in Harrogate and Imerys (France) acquisition of Regain Polymers.
There were eight other M&A deals such as I’anson’s acquisition of Golden Paste Co and Innov8’s acquisition of Viking in a ‘cross-Pennine’ deal in the Sage reseller market. Grant Thornton facilitated the sale of Viking to Innov8, a great example of a business recognising its market strengths and having the ambition to expand its geographical footprint through the acquisition of a company with a similar reputation and values.
By far the largest deal in the month was Aprirose’s £525m acquisition of QHotels from Bain Capital and Cayman Partners. QHotel is headquartered in Leeds and its portfolio is made up of a variety of hotels including spa hotels, golf resorts and luxury hotels. This includes The Queens and Oulton Hall in Leeds, Tankersley Manor near Sheffield, Aldwark Manor near York, The Midland in Manchester and three Cheshire hotels.
On the capital markets, clean energy business ITM Power, based in Sheffield, raised £29m for working capital and for the delivery of its opportunity pipeline.
Clearly we are operating in more politically-uncertain times. But the positivity of the Yorkshire entrepreneurial spirit which continues to be evidenced in our deals market indicates we are approaching the Winter and 2018 with optimism.