Deals market review in association with Grant Thornton
Transactional Tax specialist, Tom Klouda, Director at Grant Thornton in Leeds, looks at the trends and activity in the deals market in April.
Three big name Leeds companies were at the centre of national and international market activity in April, when news of their multi-billion-pound deals reached the headlines.
Most controversial of these was the proposed £13bn merger between supermarket heavyweights, Asda and Sainsbury’s. The shock announcement follows a recent spate of consolidation across the ever-changing retail landscape, which has seen two other key players, Tesco and Co-op, involved in major deals themselves. Tesco completed its £4bn takeover of Booker in March and Co-op’s purchase of Nisa was greenlighted in April.
Whilst the jury is still out on whether a union of green and orange will be allowed to go ahead – and what it would mean for consumers and suppliers – it is safe to say that the creation of such a heavyweight would transform the face of the supermarket retail industry completely.
Elsewhere in the billionaire’s club, consolidation was also on the agenda. Leeds’s own tech unicorn, Sky Bet was acquired by Toronto headquartered, Stars Group from CVC Capital Partners. Ending the rumours of an IPO for Sky Bet, this cash and shares transaction worth £3.4bn has created the world’s largest publicly listed online games company.
Another of Yorkshire’s biggest firms, Callcredit, was sold to American consumer credit reporting company, TransUnion for £1bn. Both deals are expected to close in the second half of this year.
The question for all of these companies as they navigate the next stages of post-deal integration is his how they will grow without changing their cultures and losing what has made them a success to date. This will be interesting to see as time moves on.
Looking to the rest of the deals market, overall it remains competitive, with a perception that there is still lots of dry powder and capital chasing deals. At the close of 2017, there was close to £55bn of buyout funds closed, which will need to be deployed in 2018 and beyond. When it comes to financing deals, the traditional primary lenders now not only have to deal with increasing regulation but alternative lenders, debt funds, private equity and family offices.
Finally, looking to the other notable deals which took place in April, Bradford-based Cerberus Security and Monitoring Services was acquired by The Clearway Group. The vacant property services business, received a £23m funding package from BGF and Santander, which funded this acquisition as part of its growth strategy.
In engineering, BG Engineering acquired Sheffield’s Pentag Gears and Oilfield Equipment to create a £7m turnover company, and Rotherham-based Lilleson Engineering Services underwent an MBO. Grant Thornton also advised Endless’s Enact fund on the sale of Stirling Dynamics to an overseas buyer, the French company, Assystem Technologies.
Ignite Capital, the boutique corporate finance house which was established in 2017, completed its first acquisition of another Bristol-based company, Albert E James & Son Ltd.
And, after months of speculation, Grimbsy-based, Young’s Seafood announced it was up for sale following 10 years of private equity ownership by Lion Capital, Bain Capital and HPS Investment Partners.
