Yorkshire deals market review in association with Grant Thornton

by Will Brennand, corporate finance associate director, Grant Thornton

In the first of a series of monthly columns on the Yorkshire deals market, from leading business advisory firm Grant Thornton, Will Brennand, corporate finance associate director, looks at the impact Brexit has had on deals in the region, the key trends to be aware of, and spotlights the major deals from the past month.
Analysis

Although overall, deals are down compared to this time last year, the market in Yorkshire has proved resilient during the post Brexit trading period.

One year on from the EU referendum, and with negotiations now officially underway, it’s interesting to see how the reality of the UK leaving the EU has affected deals. Drawing a year-on-year comparison with activity in 2016, volumes are down c. 10%. According to Mergermarket, that translates to 582 deals prior to the EU referendum versus 525 post, which still represents about 10 deals per week – a very healthy amount of activity.
Interestingly, whilst trade deals are down 10% for the same period, private equity volumes remain similar, suggesting that the availability of debt and private equity capital remains strong for Yorkshire businesses and management teams.

Grant Thornton’s review of June’s deals

In June, 28 deals took place across Yorkshire. The most notable deal in June will see veterinary science business Animalcare UK merge with Belgium-based, Ecuphar NV, an animal health company that has presence across Europe, in a European cross-border reverse takeover. Animalcare, headquartered in York, is also raising £30m by way of a placing. This will create a specialist pan-European animal health company and allow Animalcare to enhance its scale and capabilities.

The digital and creative sector, which continues to thrive in Yorkshire, has seen deals activity over the past month. The North’s largest agency, Ingenuity Digital underwent a management buyout, with the investment forming a key part of its ambitious growth drive. Leeds’ Intermarketing Agency was also acquired by US Advantage Smollan, meaning that it is able to expand into new areas and service offerings.

In the recruitment sector, Endless acquired Affinity Workforce, a £140m-turnover division of outsourcing giant Capita, and Hudson James Human Capital acquired Leeds based competitor Vitae Selection.

Also in June, we note Scunthorpe-based convenience chain, Nisa Retail, is set to be acquired by supermarket giant Sainsbury’s for c. £130m. Private equity investment into Yorkshire businesses remains strong, with for example, Equistone Partners Europe acquiring a majority stake in Hull based holiday home manufacturer, Willerby.