Dealmakers: Finishing strongly

Lancashire businesses hit the acquisition trail as the calendar year came to a close, mirroring the appetite for dealmaking seen nationally.

Official figures revealed that 453 M&A transactions were completed in the UK during Quarter 3 with robust interest from private equity (PE).

Market watchers also say there has been rise in the number of deals for family-owned businesses, with a rush of entrepreneurs seeking to make the most of high levels of interest from both PE and trade buyers.

Steve Ivermee, strategy and transactions leader at EY, says: “Healthy levels of dealmaking are being driven by the desire to generate new value, unlock new opportunities and deliver efficiencies.”

That picture is set to continue. Pauline Rigby, head of corporate at Forbes Solicitors, is forecasting that the M&A market in Lancashire and the wider North West will continue to be “buoyant” in 2022, with “opportunistic buyers” seeking out targets in sectors that have been hit hardest by the pandemic.

She says: “It’s certainly a different market out there and M&A deals are structured differently dependent upon the sector, the funding requirements and whether or not this is a sector that has excelled or unfortunately hasn’t excelled throughout the pandemic.”

Healthy levels of dealmaking are being driven by the desire to generate new value

In the final months of 2021, Lancashire saw deals completed across a range of sectors, from professional services to engineering, with expansion and growth a main driver for buyers and sellers. Supply chain security also influenced one of the transactions.

Blackburn based chartered accountancy, business advisory and financial planning group PM+M acquired the Accrington office of Haworths Chartered Accountants. The value of the deal has not been disclosed.

Jane Parry, managing partner at PM+M, explains the reasons behind the deal. She says: “We see real synergies between the two firms as we share a client-focused approach, have similar cultures, shared values, and a range of complementary services.

“I’m confident this deal will add value and will help us to continue investing in and growing our east Lancashire presence.”

The Haworths team will continue to be located at the Old Tannery in Accrington for the time being, with the intention to relocate to PM+M’s head office on Greenbank Technology Park in March.

Paul Spencer, a director at Haworths, is joining PM+M as a partner. He says: “Our hope is that joining PM+M will mean greater things for us and our clients.

“The increased resources, along with PM+M’s commitment to quality and people development, will ensure that we can continue to provide an exceptional client service.”

Blackburn based engineering giant Assystem also moved to widen and diversify its offer to its customers as the year moved towards its close.

The UK remains an attractive target for inbound M&A particularly in areas it has strengths including financial services

It acquired all the shares of Schofield Lothian, a London-based consulting company that primarily specialises in UK rail projects, and which has 80 specialist consultants.

Assystem says the deal will enable it to offer a “broader range” of end-to-end services for energy transition projects in the UK.

Those services will also be made available to its existing clients involved in new nuclear power station delivery, small modular reactors and renewables as well as hydrogen.

With Schofield Lothian’s expertise in consents and engagement and environmental services, Assystem says it can now serve energy projects from their early stages to completion.

Assystem is also becoming “a significant player” in engineering services for the transportation sector. Schofield Lothian’s existing clients in that field will also benefit from a broader service offering.

The Lancashire based business will provide Schofield Lothian with all its experience in digitalising engineering and managing major rail projects in France, the Middle East and, more recently, India.

Thomas Branche, Assystem’s senior vice president, energy transition and infrastructures, says: “We are really excited about the combination of our two organisations’ capabilities, which we are sure will be a success.

“This combination of Schofield Lothian’s high-end capabilities in consents and engagement and environmental services with Assystem’s engineering skills and expertise will be a real advantage for energy transition projects in the UK.

“At the same time, the combination creates a key partner for the UK transportation sector, helping to build safer, cleaner and more efficient transport networks.”

Preston-based health insurance and protection business, Santé Group, moved to acquire “a significant stake” in Dorset-based Santé Partners, again for an undisclosed sum and with accelerated growth high on the agenda.

Santé Partners was established in March 2020 by Founder Adam Sherring, who has more than 25 years’ experience building successful insurance brokerages.

He launched the business to challenge existing insurance networks, while providing growth-hungry appointed representatives (ARs) with the tools needed to build successful brokerages.

An AR is a firm or person who runs FCA regulated activities by acting as an agent for a financial services business directly authorised by the Financial Conduct Authority (FCA).

Santé Partners will now form part of The Santé Group, which includes employee health insurance and wellbeing company Nugent Santé, life insurance business Santé Life, and PMI and protection intermediary services business ArchAngel Broker.

Santé Partners manages a premium book of £5.9m and is on target to double that figure by the end of 2022, with the Santé Group premium book also hitting £35m at the same time.

Santé Group's chief executive Paul Nugent says: “The growth of Sante Partners has been hugely encouraging, bearing in mind the challenges that Covid presented, but welcoming the business into the wider Santé Group will accelerate its growth.

“It’s a perfect fit for us and offers our brands new routes to market by developing new distribution channels while giving private medical insurance professionals the chance to build a successful brokerage.”

Another deal saw east Lancashire based Furnico Furniture acquired by La-Z-Boy, becoming its first European manufacturing site.

The Lancashire firm, which has a 285-strong workforce, has manufactured the world-famous recliners since acquiring the La-Z-Boy licence in 2008. Parent company La-Z-Boy Incorporated, headquartered in Michigan, USA, re-acquired the licence in 2017.

La-Z-Boy says it intends to continue production from the two factory sites in Nelson and Colne, with plans for a product showroom being discussed.

Furnico directors David Ellison, Stuart Shackleton and Nigel Ramsey will continue to lead the business. The manufacture of white labelled products for retailers in the UK and Ireland is set to continue, alongside La-Z-Boy branded products.

Keith Wilson, president of La-Z-Boy International, says: “Given the unprecedented issues currently affecting global sea freight, the timing of this deal will reassure our customers of shorter lead times and a dependable supply network.”

Looking ahead to what 2022 has in store, Steve Ivermee at EY says the emergence of the Omicron variant of Covid will reduce confidence in certain sectors.

He adds: Sustainability and Environmental, Social and Governance (ESG) in particular, are becoming an important aspect of dealmaking, accelerated by the recent COP26.

“The UK remains an attractive target for inbound M&A particularly in areas it has strengths including financial services, fintech and high-end consumer and industrials.

We have also seen continued activity in domestic consolidation and outbound M&A as UK companies seek to increase their global footprint.

Private equity investments are likely to continue to drive the deals market as they seek to deploy their ample dry powder.

“We are also seeing evidence of a shift to a new cycle of dealmaking which follows the immediate reaction to the pandemic into a more considered phase where companies are reviewing all areas of their business strategy and looking to get fit for the future.”

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