Midlands Deals Review: Activity steadily improving

Gareth Iley

As lockdown restrictions have begun to ease, the overall sentiment in the market is that M&A activity is steadily beginning to increase with the transactions market beginning to emerge from its COVID-19 hold, says Gareth Iley, partner at Clearwater International.

The BusinessDesk.com deal tracker has reported on 12 transactions across East and West Midlands in July, which is a promising rise from previous months in the quarter. However, it’s a stark contrast to the deal activity that was taking place some 12 months ago in 2019.

There have been a range of transactions completed in the region, with a number of key themes emerging around battery technology and IT.

Utilising research and development to build technological advancement is consistently an area of interest for investors and acquirers. There are two transactions which stand out in this space; firstly, the investment in battery technology firm Aceleron by BGF with funds managed by Mercia and secondly Inspiration’s acquisition of SLE, a business that has developed a range of ventilators and other equipment for premature and sick babies. Batteries will clearly have a growing significance in all of our lives with the global market expected to grow from $59bn (£43.8bn) to $546bn (£404.8bn) by 2035. These transactions evidence that the development and investment in unique technologies will continue to create value and drive buyer interest.

It continues to be an important driver of many businesses and the ability to profitably scale these businesses attracts buyers and investors in the market. In July, Gresham Technologies acquired Solihull based Inforalgo – a technology provider to the financial services sector. Funding from ThinCats provided the finance for Windsor Telecom to acquire an IT managed services provider Keen IT Solutions. This is testament to how software and IT services have the potential to transform business operations and drive value for shareholders.

Cross-border transactions continue to be a key driver of opportunity and value creation. Ansty-based Meggitt sold its US subsidiary to a US private investment firm for £118m making this the largest deal by value recorded in the month. Meanwhile, Partington, a designer of bespoke material handling equipment such as trolleys, cages and racks were acquired by a South African listed business, Argent Industrial.

As lockdown restrictions begin to ease, we are beginning to see a steady flow of M&A activity taking place in the Midlands. Business demands are increasing as the economy gradually gets moving again, which will only accelerate as more and more employers continue to take their workforce off the furlough scheme and back into busy city centre office blocks.

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