Dealmakers: Working beyond borders

Overseas investors are targeting Lancashire businesses with a flurry of cross-border deals in recent weeks that has seen acquisitions by US, Australian and European companies.

Dealmakers say the trend mirrors what has been happening across the wider North West, with a surge in the number of overseas firms looking to set up operations in the region.

A study of mergers and acquisitions activity in 2022 carried out by Experian Market IQ highlighted the prominence of cross-border dealmaking in the UK and the growing interest of US bidders in North West targets.

The figures are impressive. According to Experian’s research the value of inward investment into the UK increased by around 41 per cent year on year in 2022, reaching nearly £100bn from 727 inbound transactions.

Blackburn-based Northern Industrial is one of the Lancashire businesses that now has new overseas owners following a recent cross-border deal.

Northern Industrial is one of the UK’s biggest suppliers of industrial spare parts and proactive maintenance solutions and has been on a successful growth journey of its own. In recent years it has been building its global customer base by opening operations in Germany and Mexico.

It announced in April that it has been acquired for an undisclosed sum by Radwell International, a leading global supplier of surplus and remanufactured industrial control systems. Headquartered in Willingboro, New Jersey, the new owner employs a team of more than 2,000 in 15 sites across the globe.

David Lenehan’s father John founded Northern Industrial in 1978. David, who took over as managing director, now becomes general manager of Europe and says: “After over 40 years of growth, Northern Industrial is delighted to become part of Radwell. It is a global force to be reckoned with.

“Its services, ethics and culture are in-line with everything we have built here and our people can look forward to a bright future as part of the Radwell family.

“This is a hugely positive move not only for all our team in Blackburn but also for our customers across the world. With this change, we aim to establish a closer connection between all our products and services and provide a streamlined source for our customers.”

Radwell’s chief executive Brian Radwell is also excited for the future and talks of the opportunities he believes it presents its customer base.

He adds: “Our overarching goal is to provide the best possible service and quality, and we believe that this acquisition will help us achieve that.”

Colne-headquartered Tharstern Group also has new US owners. It has been acquired by Pittsbsurgh-headquartered productivity Software (ePS).

The deal, which was announced at the end of March, provided an exit for equity investor Gresham House Ventures. No value has been put on the acquisition. Tharstern Group provides management information software for the printing, packaging and label industries, helping businesses to digitise processes and accelerate workflows.

From its east Lancashire base, the firm serves customers across the UK, Ireland, North America, Australia and South Africa.

Its new American owner provides business and production software technology for the print and packaging industries. It says the deal furthers its growth strategy, adds new technologies and will drive further geographical diversification.

The Gresham House Ventures team invested in Tharstern in July 2014 in a move that has supported Tharstern in accelerating the development of a new cloud-based SaaS product. Gresham also supported a restructuring of the business’ international software development resources, as well as the appointment of a new chair in April last year.

Keith McMurtrie, chief executive of Tharstern, says: “We are very excited to join the ePS family and we are confident in the additional value ePS can bring to our customers.

“ePS has the technology, solutions, and global reach to enable continued growth and success across the Tharstern customer base for years to come.”

Nelson-based Graham Engineering (GEL), one of the county’s best-performing SMEs according to Lancashire Business View’s most recent Hot 100 rankings, has been acquired by K-TIG of Australia.

GEL has strong foundations in nuclear product development, with long term production agreements for major clients in the sector.

It has also applied its capability to grow into other highly regulated markets requiring high integrity stainless steel or other exotic metal fabrications.

GEL now provides advanced manufacturing solutions to clients across a broad-spectrum of industries including, nuclear, aerospace, security and medical industries.

The company ranked 84th in Lancashire Business View’s Hot 100 in 2022, registering £1.4m pre-tax profit on revenues of £16m, with a workforce just shy of 200.

K-TIG, is an innovative technology and welding company listed on the Australian Stock Exchange. Its technology is complementary to GEL’s range of advanced manufacturing capabilities. Again, no figure has been put on the deal. A share purchase agreement was signed towards the end of March, with completion expected in the near future subject to Australian Securities Exchange (ASX) and other regulatory approvals.

Adrian Smith, K-TIG chief executive, says: “We are delighted to have secured the acquisition of GEL and look forward to providing our technology in addition to the advanced manufacturing techniques already offered by GEL to the nuclear industry and other demanding sectors.”

The industrial products team at corporate finance experts Transcend Corporate, led by Chris Bill, advised the GEL shareholders on the sale.

Chris says: “The business is a strategic asset in the nuclear industry and interest in acquiring it was extremely high. In managing the sale process, we were able to identify K-TIG as an ideal future home for GEL.

“As someone who has been personally involved in the global nuclear industry, it is very pleasing for me to help an important business such as GEL find a new strategic home and to accelerate K-TIG’s increasing support of the UK nuclear sector.”

The new owners of Preston-based BREC (Holdings) aren’t quite so far away. One of the UK’s leading providers of conveyor belt services, it has been acquired by Richemon Group International based in the French city of Bordeaux. BREC, which has 40 employees, also has a North East site in Jarrow.

The company provides conveyor belts, on-site vulcanising and related services to major businesses across the UK and internationally. Its clients include Aggregate Industries, Hanson Cement, Tarmac, Tata Chemicals and Pilkington Glass.

Another March deal, again for an undisclosed sum, facilitates the exit of BREC’s founding shareholder and director Geoff Toft who started the company in 1975. BREC’s existing management team, led by managing director Steve Peruzza, will continue to oversee operations.

Geoff says: “While the ownership of the company has changed, our many customers can rest assured they will get the same quality products and service they have come to expect from BREC and our excellent management team will continue to drive the business forward.”

Adrian Young, tax partner at North West accountancy firm Hurst, says it has witnessed the surge of interest by overseas companies looking at setting up operations in the region.

He says: “Some common themes are emerging. Chief among them is finding an effective way to do business in the UK. This has partly been driven by the need to overcome Brexit-related barriers, but I think it is also symptomatic of a wider uptick in both inward investment and imports.”

Lancashire is looking to attract more foreign direct investment as part of its ten-year internationalisation strategy. Foreign owned businesses in the county currently make up about one per cent of its companies but they contribute 17 per cent in terms of GVA.

The strategy is focusing on digital, aerospace, advanced manufacturing, low carbon technologies and food and drink.