West Midlands corporate deals review in association with Clearwater International

Gareth Iley, partner, Clearwater Corporate Finance

Clearwater International partner Gareth Iley explains how deal volumes have been by uncertainty

Overall, deals in the first five months of the year across the Midlands fell from 156 to 104 compared with 2016, with deal makers holding fire on pursing acquisitions given uncertainty around Brexit. However, it seems that some British PLCs have ignored this “let’s wait and see” tactic and are pushing ahead with purchases as a way of expansion.

May marked AIM-listed GB Group’s (GBG) acquisition of Worcester-based address validation business PCA Predict (PCA) for a consideration of £73.9m. The deal marked the identity management specialist’s first acquisition of the year, following purchases of UK-based IDscan Biometrics in 2016, US-based Loqate in 2015, and US-based CDMS and Australia-based Dectech Solutions in 2014. However, it isn’t expected to be GBG’s last this year; the £570m market cap business is in talks with several other targets that could help provide additional operational capability and entry into new market segments.

Set up in 2001, PCA (formerly Postcode Anywhere) is a market leading provider of cloud-based address management services with over 10,000 customers. It is best known for its “what’s your postcode?” and store-finder technology, processing over 7 million transactions daily for customers such as Tesco, Virgin and Hotel Chocolat amongst numerous others.

PCA provides scale to position GBG as a leader of UK and International address validation and data quality services, a fundamental component of GBG’s Identity Data Intelligence proposition, and opens immediate upsell opportunities.

Another deal in the address validation space was the MBO of Aligned Assets, backed by Allied Irish Bank, in March 2017, in a transaction advised by Clearwater International.

The UK address validation market is estimated to be worth around £200m-£300m, with 28 million residential and business addresses and 1.4 million business names in operation. Demand is being driven by an e-commerce industry that has witnessed explosive growth in the last decade.

Equally, there has been an increasing demand from banks and other organisations that handle sensitive customer data to keep customer names and addresses up to date and accurate.

*Deal volumes in the West Midlands so far this year compared with 2016

2017 2016
May 20 29
April 21 28
March 16 32
February 20 30
January 27 37
Total 104 156

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