Deals activity ‘bounced back’ after first lockdown

Independent advisory firm, Dow Schofield Watts, says its northern offices enjoyed a record year in terms of the value of deals they advised on.

Its teams in Yorkshire and the North West completed 54 deals with a total value of £1.27bn during the year.

While the number was lower than the 69 recorded the previous year, the overall value was up by 32% and the highest to date.

Roger Esler, head of the Yorkshire & North East Corporate Finance team, said deals activity had bounced back at a surprising pace after the initial shock of the first lockdown.

He added: “The pandemic has been different to previous events such as the financial crisis where structural issues took years to resolve.

“After the initial shock in March, when survival was a priority, businesses in most sectors got back to work with determination.

“The unprecedented Government interventions, availability of capital and general financial health of large corporates resulted in a resumption of paused deal processes over the summer, compounded by new processes coming on stream in quarter four.

“Business valuations have held up strongly. Buy and build activity in private equity portfolios will be evident alongside new investments, notably in value-add services and technology-led businesses.

“The attractiveness of the UK has increased with Brexit behind us and with a low exchange rate, cross border trade buyers will be very active.

“Although the hardest hit sectors in retail and hospitality will need to be refinanced and restructured, overall the outlook for the deals market for 2021 remains strong and diverse.

Sophie Colloby, head of the transaction services team, added: “Following a strong start to the year and high M&A expectations, we spent the initial lockdown period helping clients with immediate business issues such as cash flow forecasting while transitioning to remote delivery of our core due diligence work.

“The fact that deals activity has resumed reflects the remarkable ability of our team and our clients to rise to the challenges arising from the pandemic.”

Key deals the firm acted on in the region included the sale of Harrogate-based rail-tech business, Comms Design, to Unipart Rail; the acquisition of Tile Giant from Travis Perkins by Leeds-based investment group Coverings; BGF’s investment in Bayfields Opticians; the MBO of Harrogate-based Lights4fun backed by NorthEdge Capital; and the acquisition of Doncaster-based NMC Group by GRITIT, the infrastructure services group backed by Total Capital Partners.

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