Regions’ deals market resilient with more than £1bn-worth of transactions

Northern professionals have worked on more than £1bn-worth of support for the region, it has been revealed.

EY’s North Strategy and Transactions teams acted on 10 completed deals worth more than £643m in the third quarter of of 2021.

In the North West, EY supported CPOMS Systems on its sale to Raptor, by providing integrated commercial, financial and tax vendor due diligence, and supported Esken on its rights issue and fundraising. In addition, EY acted as corporate finance advisor and provided financial and tax vendor due diligence to MPP Global Solutions, as it was acquired by Aptitude Software.

In Yorkshire, the market remains very active, with EY providing transaction support to Etex as it acquired Sigmat, and to LDC in relation to its acquisition of Texecom from FTSE 100-listed technology group Halma. Additionally, the team provided transaction support to Gravity Global and Wholebake, as both secured investment from Elysian Capital.

EY provided further support to Advanced Supply Chain Group, which was acquired by Reconomy and to Bambino Mio, to support its investment from BGF.

Mark Clephan, EY

Mark Clephan, corporate finance partner at EY in the North, said: “As we moved into Q3 we continued to see the deals market buoyant across the region, as it was during the first six months of the year. It is this level of activity which provides us with the opportunity to strengthen our own team, so we can ensure we are best placed to serve the needs of our clients.”

Steven Kingham, partner and head of transaction services for EY in the North West, said: “The deals space continues to accelerate, and we have a high number of deals under way and due to complete in Q4. The pipeline of work for next year is looking strong, with businesses across a range of sectors expecting to transact and with the IPO market continuing to be active.”

Noam Handler, partner and head of transaction tax for EY in the North, said “The EY North transaction tax team continues to support the strategy and transactions team in the region across all deals, with the continued investment in the team, across senior levels in particular, reflecting the ongoing strength of the market.”

Meanwhile, BDO announced it has advised on more than £350m-worth of deals across the North, as M&A activity in the North West continues to accelerate.

M&A teams in both Manchester and Leeds have completed 10 transactions in the past two quarters, which have attracted strong levels of private equity investment, as well as cross-border interest.

High profile deals include investment in Knutsford-based Prime Global Medical Communications by US private equity firm, Levine Leichtman Capital Partners, the sale of PE-backed SaaS business Hello Soda to Acuant, the global trusted identity platform for fraud prevention and AML compliance, and the majority sale of UK promoter and event organiser UK Live to Kilimanjaro Holdings – the UK subsidiary of DEAG Deutsche Entertainment AG, the Hamburg-listed leading entertainment service company and provider of live entertainment in Europe.

Rob McCann

Rob McCann, corporate finance partner at BDO in Manchester, said: “Deal activity across the North has accelerated post-lockdown, primarily as a result of some pent up activity in attractive sectors, such as technology and tech-enabled services, life sciences, and other areas of healthcare, in particular.

“Demand remains strong for these and other sectors, as trade acquirers continue to grow and diversify, whilst private equity capital remains in abundant supply, resulting in transaction volumes remaining at a healthy level.”

And the Liverpool City Region’s economy has been boosted by more than £20m thanks to the impact of FW Capital and the Northern Powerhouse Investment Fund (NPIF).

£12m of the funds have been deployed directly by NPIF-FW Capital Debt Finance, managed by FW Capital and part of the Northern Powerhouse Investment Fund (NPIF), with more than £11m attracted from private sector investors. Nearly 200 jobs have been created as a result of the investments. They have invested into a wide variety of sectors in the region, ranging from manufacturing and construction to social care.

FW Capital will be able to help even more businesses as it can now also lend to B2C sectors. It is keen to talk to businesses in the retail, hospitality, and leisure sectors about how NPIF could help them reach their growth ambitions.

Carol Bolland, an investment executive in FW Capital’s Liverpool office, said: “We can lend from £100,000 to £750,000. Therefore, businesses can access high value finance without having to consider equity funding. This means they don’t have to sell a stake in their business and can retain full control.

“Our ability now to invest in B2C businesses means that we are able to lend to some of the sectors hardest hit by the pandemic such as hospitality. We are delighted that we can now help to support them as the economy recovers and we would encourage these businesses to get in touch regarding the Recovery Loan Scheme which we are accredited for.”

One notable NPIF-FW Capital investment in to the B2C sector in the Liverpool City Region is Wirral Care Services which received a loan last year to support the business through the uncertainty caused by the pandemic.

The company is run by husband-and-wife team Mike and Catharine Chalton, with offices in Prenton and West Kirby. It provides specialist dementia care and domiciliary care services to the elderly and vulnerable throughout the Wirral area.

Carol Bolland

Asif Hamid, chair of the Liverpool City Region Local Enterprise Partnership (LEP), said: “NPIF has provided valuable support to our business community since its launch in 2017 and it is fantastic to see the impact it is having on unlocking business potential and that NPIF-FW Capital Debt finance has created nearly 200 jobs in the city region.

“NPIF and other such funds can help innovative businesses sustain and grow, ultimately creating the opportunities that will help drive the recovery of our city region. In these challenging times I would encourage other businesses with the potential for growth to take advantage of the support and funding that is out there.”

Mike Chalton said: “The pandemic caused a great deal of uncertainty in the care sector and we needed a buffer to ensure that we could continue to offer a high quality care service to our customers, many of who were left even more isolated and vulnerable. Companionship is a major issue in normal circumstances, but it was made even worse.

“We received a loan which helped to cover additional costs to the business such as PPE and recruiting extra staff. FW Capital clearly guided us through the funding process, and we were able to access the finance in a short period of time.

“Despite 2020 being a difficult year, we have managed to grow and recently acquired an office in Chester so we will expand our offering to the Chester and West Cheshire area.”

Sue Barnard, at British Business Bank, said: “FW Capital has played an important part in the success of the Northern Powerhouse Investment Fund, helping to deliver vital funding focused on small businesses across Liverpool, the North West, and Tees Valley since 2017. NPIF has played a crucial role in ensuring many businesses have been able to survive the pandemic and now can recover and rebuild.

“We congratulate FW Capital on reaching this milestone and with their help, alongside our other accredited fund managers, NPIF will continue to support growing businesses across the North.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.