West Midlands corporate deals review in association with Clearwater International
By Gareth Iley, partner, Clearwater International
THE total number of deals completed in the Midlands in December stood at 46, an increase on November’s 40. However, activity was largely dominated by real estate purchases and debt refinancing, with the rate of strategic corporate acquisitions slowing down during the Christmas period.
Private equity investment in Midlands corporates remained strong. Livingbridge invested £10m in Nottingham-based French food chain Le Bistrot Pierre. The chain currently has 14 restaurants including locations in Leamington Spa and Stratford-upon-Avon. The total value of the UK restaurant market is predicted to be £52bn by 2017, with the rate of growth expected to be the same all over the country.
Le Bistrot Pierre plans to use its new investment to expand its presence, with ambitions to open new restaurants in Birmingham and Swansea in 2016.
Shropshire plant hire and earthworks specialist Hawk Group also benefited from £8m of new investment from BGF. Hawk Group is the market leader in the plant hire and earthwork sector and its fleets have served a number of critical UK infrastructure projects, including the construction of the Olympic Park, Hinkley Point nuclear power station, and the Channel Tunnel Rail Link.
Increasing investment in house building and UK infrastructure projects is expected to drive significant growth in this sector. The investment will help to meet this increased demand, along with funding fleet development and a diversification into the quarrying market.
BGF continued its focus on the industrial sector with a £3m investment of Stoke-based asbestos prevention firm Environmental Essentials.
In 2011 the EU ordered the UK to tighten its asbestos regulations and the company is on track to reach its £10m revenue target.
Environmental Essentials has M&A ambitions in the asbestos market. The investment will help meet these, along with funding an asbestos training centre.
Outside of private equity investment, the largest deal of the month was CVC’s purchase of RAC from The Carlyle Group.
CVC, Formula One’s largest investor, has paid up to £1.5bn for a majority stake in partnership with Singapore investment firm GIC. CVC established a Strategic Opportunities Platform to meet investors’ desire to place their funds in long-term, low risk and high quality firms.
This is the platform’s first investment and it plans to build on RAC’s £80m growth in revenue between 2010 and 2014.
There were also some great examples of Midlands firms reversing the trend of UK businesses moving into foreign ownership.
Smethwick-based cold roll firm Hadley Group acquired Dutch target Overeem in a multi-million pound deal. Overeem manufactures specialist rolls primarily for Europe’s automotive industry. This acquisition will aid Hadley Group’s expansion in the automotive sector. It also emphasises the importance firms are placing on creating supply chain with greater local responsiveness to meet their international growth objectives.
In another cross-border deal, Birmingham-based number plate manufacturer, Hills Numberplates took another step towards becoming an international player by acquiring a French competitor, Faab Fabricauto.
Previously owned by 3M’s Traffic Safety and Security Division, Faab Fabricauto has a strong presence in the French number plate market with 150 workers.
