Endless highlights ‘enduring appeal’ of British businesses despite Brexit uncertainty

PRIVATE equity house Endless says the “enduring appeal of British businesses” continues despite economic and political uncertainty surrounding the UK’s future relationship with Europe.

The Leeds-based private equity house has sold four companies since June, attracting strong interest from national and international buyers looking to acquire strategic assets in the UK market.

The activity also shows that once-struggling businesses can quickly become strategically valuable with the right investment and strategy.

James Woolley, partner, said: “We are getting good value for businesses post-Brexit vote. Investors are still seeking good assets in the UK and are willing to pay a good price for them. Endless is holding strategic assets wanted by national and international organisations. Trade buyers are still open for business and want to get deals done in the UK.”

He added: “After the EU referendum, activity was put on hold for a short period until people realised that the status quo would remain and they should continue to act strategically and look for opportunities in the UK and Europe.

“That situation might change when the Government releases more details about its plans over the coming two years. But as a private equity firm, we cannot stand still. Europe will continue to trade with Britain and respective European governments will be under pressure to do trade deals with Britain.

“At Endless, we are confident about the future and will continue to look for the right opportunities, whether they are buyouts, non-core businesses, refinancings or turnarounds. We are able to act quickly and can commit significant amounts of capital to support the companies we invest in.”

Earlier this week, Endless acquired MTI Europe, a technology firm with sites across the UK, France and Germany, demonstrating the firm’s strategy of pursuing overlooked assets with underlying value.

It believes there will be significant opportunities to invest further in such businesses in 2017.

The most recent disposal was at the end of last month when Enact, the SME-focused Endless fund, sold the West Cornwall Pasty Co. to the UK-based food group Samworth Brothers for an undisclosed sum.

The fund, backed by investors including former England footballer Danny Mills, bought West Cornwall Pasty Co from administrators in 2014, saving 230 jobs.

The exit delivered a fivefold-plus return to investors after Endless and the management team quadrupled profitability, extended the product range and overhauled the food retailer’s brand.

Endless sold Chaucer Foods, a specialist supplier to some of the world’s biggest food groups, to Japanese-based manufacturer Nagatanien in a $130m deal earlier in December.

Chaucer attracted competing offers from trade buyers in the United States and the Middle East.

Endless sold the company for a multiple of 13 times its earnings before interest, tax, debt and amortisation, well above the sector average, after investing millions of pounds in its global supply chain operations.

Endless completed another sale to a Japanese buyer in August with the disposal of the business processing service firm Liberata Group to Outsourcing Inc for an equity value of £43m.

The investment was one of the Japanese group’s biggest to date and represents a significant foothold and platform for growth in the UK business processing market. “The issue of Brexit never arose during deal discussions,” said Mr Woolley.

While under Endless’ ownership, Liberata sold its subsidiary Trustmarque to Capita for £57m in June, representing a multiple of six times earnings before interest, tax, debt and amortisation for the technology services business. It was another strategic acquisition, strengthening Capita’s cloud services offering.

Mr Woolley said: “We are proud of our transformational investments in West Cornwall Pasty Co, Chaucer Foods, Liberata Group and Trustmarque and believe each of these companies has a bright future under their new owners who are building strategic positions for future growth in the UK.”