East Midlands deals market often at “nosebleed pace”
The pace of the deals market in the East Midlands can often be “nose-bleeding” at present, according to one local dealmaker.
Paul Bevan, corporate finance partner at Mazars, said that he’d recently worked on eight deals in eight weeks.
“The UK economy is being fuelled by an easy access to cash and this is bringing forward deals – usually around the £5m-£20m mark,” said Bevan at TheBusinessDesk.com’s recent Buying and Selling Your Business breakfast event.
Bevan added: “You might think that Brexit has brought about a hostility towards the UK, but that’s not what I’m hearing. I’m hearing that overseas buyers – in their words – “want to buy Anglo-Saxon”. Furthermore, the UK is seen as a stepping stone into the wider European market by a lot of North American companies.”
(L-R) Bathija, Griffith, Taylor
Duncan Taylor, partner at law firm Nelsons, touched on the issue of succession and said it wasn’t always a family issue.
“Businesses owners looking to exit must ask themselves: is the next generation ready to take over. If the answer is no, then the company might not be saleable at that point and may affect the perceived value of the company.”
He added: “Sellers have to make the company as attractive as possible before the enter the process.”
David Griffiths, managing director of Sterling Capital Reserve, said that most people were using his peer-to-peer method of raising cash for MBOs or MBIs.
“The banks won’t lend to people looking to do deals on sub-£1m companies,” he said. “Funding through peer-to-peer grew out of the recession; we’ve done around 250 peer-to-peer deals in the last four years. The money can effectively be used as bridging funding.”
The audience also heard from Guatham Bathija of Loks Holdings, who had recently bought the company using peer-to-peer lending brokered by Sterling Capital Reserve.
He said: “Before I met David, funding the deal was proving incredibly difficult and dealing with the banks was an incredibly frustrating experience. If you mentioned the word ‘MBI’ to them, they’ run a mile.
“Once I’d been introduced to David we got the deal over the line in two months – I’d say the opportunities for peer-to-peer lending to fund deals are significant.”
