Yorkshire deals market review in association with Grant Thornton

2017 was a strong year for M&A in Yorkshire and it’s already shaping up to be an even more exciting 2018, says Richard Goldsack, Corporate Finance Partner at Grant Thornton Yorkshire.

The first few weeks of the New Year pose the perfect time for me to reflect on what was, overall, a vibrant year for deal activity across the region. Some of the standout trends we saw in 2017 were:

1.Large buy-outs are back: With buoyant debt markets and well-invested private equity (PE) funds, large buy-outs were aplenty across the region. Most notably: the £750m sale of Zenith to Bridgepoint; the CapVest acquisition of Karro Food Group – a testament to the complete turnaround of the business under Endless, who acquired the pork processor from ailing Vion Foods in 2012; Pure Gym being snapped-up by US PE group, Leonard Green and Partners; the sale of MKM Building Supplies to Bain Capital; the purchase of Leeds Bradford airport by Amp Capital and the takeover of Servelec by Montagu. We expect conditions to remain strong for further buy-out activity over the next 12-months.

2.  Brands changing hands: A number of a well-known Yorkshire brand and companies were acquired in 2017. Nisa was bought by the Co-operative Food Group; Heron Foods integrated into B&M Bargains; Sidhil to Drive, Devilbiss and Henderson Insurance to Aon. We look forward to seeing how these develop and grown under new ownership.

3. Private Equity investment strong across the mid-market: Deal volumes remained strong throughout the year, including many primary investments such as: Park Leisure (Midlothian); Stowe Family Law (Livingbridge); Ultra Finishing and Filmore & Union (both BGF); Smoothwall (Tenzing); Neom (Piper); Cooper & Turner (Watermill) and Sewtec (Endless). There were also many secondary buy-outs including: Pelsis (LDC); Willerby (Equistone); and Yorktest (Key Capital).

4.Debt funds on the rise: Demonstrated by the volume of mid-market deals taking place in 2017, examples of which include the Frontier investment in Ingenuity Digital; Apera Capital in Seabrook Crisps; and Mid-Cap Financial investing into Cooper & Turner.

5.A varied year for Yorkshire PLCs: Significant activity for PLCs resulting in a wide variety of deals. Whilst some were making significant acquisitions. Brandon Hire takeover by Vp and Marshalls acquisition of CPM, others were carving-out non-core divisions (SIG’s carpets and flooring business to Endless). Elsewhere some were investigating to reverse take-overs, like Animalcare Group’s agreement to acquire Belgium-headquartered Ecuphar NV, or taken-private, as was the case with Servelec.

With stock markets at an all-time high, 2017 drew to a close with Yorkshire’s only IPO of the year, which saw Sheffield-based Sumo Digital floated on the Alternative Investment Market at a value of £145m. Grant Thornton has a long-standing relationship with the leading games maker and is proud to have supported in the IPO, which CEO, Carl Cavers, says is a significant step towards the company achieving global leader status within its industry. With Sumo Digital a shining example of Yorkshire’s thriving tech sector, Carl was named one of Grant Thornton’s ‘Faces of a Vibrant Economy’ for 2017, and it’s no surprise why. We look forward to continuing our relationship as the company moves forward with its ambitions.

We go into 2018 with a high level of confidence, with a number of deals already closed and more to come in Yorkshire in the first quarter, Elysian exiting Kelling Group to Alinda Capital and Complete Business Solutions receiving backing from Abercross Holdings. Here’s to another successful year dealmakers!