West Midlands corporate deals review in association with Clearwater International

By Gareth Iley, partner, Clearwater International

THE total number of deals recorded by the Business Desk’s M&A bank in the Midlands in January stood at 37, a decrease on December’s 46.

Hot property

Each month The Business Desk records a high level of property/real estate purchases, which we don’t usually comment upon. However, last month saw a property deal of particular interest.

Just five months after its highly anticipated opening, Grand Central shopping centre in Birmingham was sold for £335m to property investment firm Hammerson plc, also the co-owner of the nearby shopping centre, Bullring.

The deal provides current owner, Birmingham City Council, with a much needed financial boost.

Grand Central, which cost £150m and took five years to build, was developed as part of the £750m New Street Station regeneration project, and is home to 435,000 sq. ft. of prime retail space, with 66 new shops including the largest John Lewis store outside of London.

With growing demand for retail space in prime UK shopping centres there is potential for strong rental growth at Grand Central. The deal is also evidence of the increasing confidence to invest in the region. 

NOTE: Since writing these notes, Hammerson has revealed it intends to sell a half share in the shopping centre to the Canadian Pension Plan Investment Board for £175m. CPPIB is the group joint venture partner in the Bullring

Anyone fancy a holiday?

There is a growing trend of holidaying in the UK rather than abroad, and according to industry estimates Britain has more than 3,000 caravan and campsites.

The trend of ‘glamping’ is also on the rise, with higher-income earners – who would not normally camp – staying in luxury yurts, safari tents, shepherd huts and treehouses.

Away Resorts, owner and operator of luxury holiday parks and camping facilities, expanded its portfolio with the acquisition of Cosways Holiday Park.

Away Resorts was taken over in April last year by mid-market private equity investor LDC in a secondary buyout transaction advised on by the Midlands team of Clearwater International.

Part of LDC’s strategy was to help Away Resorts identify high quality acquisitions to complement its portfolio and grow its share of the UK market, which is currently highly fragmented.

The UK holiday market has seen a number of other deals in recent months including the mega-merger of Parkdean and Park Resorts, which created Britain’s biggest holiday home park operator.

Sticking with the holiday theme, Birmingham’s Equistone Partners Europe sold its majority stake in tailor-made experiential travel company, Audley Travel, to rival private equity firm, 3i.

Equistone invested in Audley in 2012, and since then the company has demonstrated strong growth, with revenue doubling to £165m in 2015. It also pursued an expansion programme into the US market – which now accounts for 10% of the group’s business – and now provides travel to more than 80 destinations on six continents.

US continues to pursue the UK

Over the last year we have reported on a number of deals involving the US’s continued pursuit of UK based companies, and last month was no different.

Staffordshire-based smart battery manufacturer Accutronics was acquired by NASDAQ-listed Ultralife Corporation for £8m.

The deal provides Ultralife with the ideal platform to develop their business in both the European and the medical markets; which industry experts are predicting will see mid to high single digit growth.

Accutronics was advised by Birmingham based corporate finance firm Orbis Partners.

Another deal advised on by Orbis Partners was the acquisition of Progress Care, a specialist education and care provider, by Priory Group, a provider of behavioural care. The deal comes after the announcement that Priory will be acquired by NASDAQ listed Acadia Healthcare Company, operator of behavioural and mental health treatment facilities.

Acadia first entered the UK market in July 2014 via the purchase of Partnerships in Care.

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