Sunday, April 18, 2021

Midlands M&A market ‘buoyant’ as ever, as deal volumes rebound – BDO

The Midlands M&A market is as ‘buoyant’ as ever, after deal volumes rebounded in the first quarter of 2021.

Despite the pandemic, the advisory division of BDO LLP has seen a rise in transactions in the first three months of the year, advising on 50 deals in the Midlands – which included a bumper week in M&A, with five sales completing in five days in March.

This compares to 41 deals advised on in Q4 2020, with a notable proportion of transactions in the region attracting private equity investment. It demonstrates a continued appetite from private equity houses to invest significant amounts of capital in the regional market, which has been accumulated in recent years.

The strength of corporate transactions in the first quarter of 2021 has been driven by corporates continuing to consolidate in chosen markets and carving out non-core businesses. Meanwhile, a number of agile owner-managed companies responded to anticipated increases in Capital Gains Tax, ahead of the Spring Budget by securing a sale.

Roger Buckley, M&A partner at BDO, said: “Amidst high levels of uncertainty, we saw many reasons for optimism in the region in 2020 – so much so that it created a strong expectation that M&A activity levels would rebound towards the end of the year and into 2021.

“That sense of optimism is being reflected in the pattern of M&A deals our Midlands team is seeing in the market, with the Industrials and Services sectors, showing particular robustness as the market stands up to the challenges being faced.”

In Q1 2021, the Midlands team acted as lead advisers to the shareholders of Mar Risk Services Limited (MarRS) on the sale of the company to Costero Holdings. The successful sale of MarRS adds to BDO’s M&A credentials and experience across the insurance sector.

In addition, the team advised Allegion plc on the non-core carve-out of QMI Door Solutions in the UAE to HLD Group in the UK; HVAC company Mikrofill 2000 Limited on the sale to Stuart Turner Limited backed by LDC; as well as advising the shareholders of Prolectric Services Limited on its sale to Hill & Smith Holdings PLC for up to £18.2 million.

John Stephan, M&A partner at BDO, added: “The Midlands M&A market is as buoyant as ever, with the start of 2021 demonstrating the levels of capital available and the appetite amongst business to drive growth through consolidation.

“We have seen a desire to execute ambitious buy and build strategies, whether that’s through domestic or cross-border transactions – the Midlands remains an extremely active place to do business.”

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