Cross-border deals soar as North West companies go global

Cross-border deals involving North West companies have doubled in the past year, with the region’s companies completing transactions worth £6.6bn in 2018, according to Deloitte.

The business advisory firm’s research, conducted in partnership with Experian Corpfin, revealed that 120 deals were completed last year – double the 59 witnessed in 2017.

Deal values were also considerably higher, with 2018’s total up 450% on the £1.2bn spent the previous year.

Overseas buyers were particularly active over the course of the year, with a total of 79 deals worth £1.4bn completed.

This includes the £527.5m acquisition of Warrington-based speciality chemicals manufacturer Perstorp by North Carolina-headquartered Ingevity Corporation, as well as the sale of Manchester’s iconic Midland Hotel to Swedish hotel operators Pandox AB for £115m.

North West companies continued to look abroad as part of their acquisition strategies, agreeing terms on 41 deals worth a total of £5.2bn.

Most notably, Blackburn’s EG Group completed a quartet of purchases over the 12 months, worth a combined total of £2.75bn.

This included the £1.5bn acquisition of Cincinnati-based Kroger’s Convenience Stores in February, enabling the company to build on its petrol forecourt business in the US, with further deals completed in the Netherlands and Australia.

Other transactions include the £392m acquisition of Indianapolis-headquartered footware brand The Finish Line by JD Sports, while Dechra Pharmaceuticals bought Dutch vetinary medicines specialist AST Farma for £296m.

The US remained the most prolific country for both inbound and outbound deal activity, with nearly 40% of all transactions (46) involving an American company.

Germany were next with 10, followed by the Republic of Ireland (eight), Sweden and the Netherlands (seven), France (five) and Italy and Australia (four).

Olly Tebbutt, partner at Deloitte in the North West, said: “With the Brexit deadline approaching, it is perhaps unsurprising to see a number of the region’s companies look to solidify their presence in global markets.

“This will enable them to hedge against any further economic uncertainty and bolster their existing offering in new locations.

“It is also encouraging to see in figures the increase in interest from overseas buyers, which confirms the level of engagement we are seeing from foreign purchasers in ongoing transaction activity.”