Deal volumes standing up despite Brexit pressure

Deal volumes in the Midlands remain high, although business are adopting a more cautious approach, law firm Browne Jacobson has said.

The firm, which has offices in Birmingham and Nottingham, said its dealmakers had completed around 60 transactions in H1 2017 with an aggregate value of more than £400m.

The team’s 30-strong corporate finance and banking advisors said they had seen encouraging levels in areas such as manufacturing, residential housing, independent healthcare and the hotel & leisure sector.

Major corporate finance and banking deals completed during the first six months of 2017 included the sale of Raphael Healthcare to Elysium Healthcare, acquisition of Brightwork for Staffline Group, secondary management buyout of Addo Food Group, sale of Hangar Seven to The Hut.Com, the RBS-backed acquisition of Retail Assist and Clydesdale Bank’ s acquisition of W.Corbett & Co.

Michael Stace, corporate finance partner at Browne Jacobson, said: “Whilst we have sensed a more cautious, low-risk approach to deal making, volumes and values have remained pretty strong over the last 12 months despite the EU Referendum result last year.

“We have also seen a variety of deals being pursued and completed which is a sign of the appeal and resilience of the mid-market arena, particularly across the Midlands region.

“Looking ahead, we don’t believe that businesses will put off making strategic decisions as discussions over Brexit get underway especially as sellers are looking to take advantage of the relatively high earnings multiples and achieve an exit rather than waiting to see what the market conditions are like post Brexit. Consequently, we remain positive on the overall outlook for M&A activity over the next six months.”

Paul Ray, head of the firm’s banking & finance team added: “In the current climate lenders are minded to support established business with a strong track record. As a result we have seen a healthy appetite for bolt-on acquisitions post-Brexit and this is likely to continue following the outcome of the General Election.

“We are also likely to see increasing levels of interest from overseas investors looking to take advantage of the continued fall in the value of sterling.”