East Anglia: Region is bucking national downward trend in M&A activity, says Grant Thornton

EAST Anglia has bucked a national downward trend in merger and acquisition (M&A) activity, according to business and financial advisers Grant Thornton UK LLP.

A total of 478 M&A deals worth �17.1billion were announced in the UK during the first quarter of 2012 compared with 535 deals worth a total of �19.3bn in the final quarter of 2012.

Both figures represent a decline on the previous quarter of around 11%, with M&A activity involving UK-based targets having now fallen for four consecutive quarters to its lowest level in number terms since the 1990s.

The number of UK deals backed by private equity has remained steady in the last four quarters, with 77 private equity deals valued at �3.4bn being recorded in the first three months of this year.

But since the opening quarter of 2011, when 685 deals worth �26bn were recorded, the overall number of announced deals has fallen by around 30% and UK acquisitions abroad have also fallen, by more than half compared with the first quarter of 2011.

However, Grant Thornton East Anglia’s corporate finance team has handled a number of significant deals over the past 12 months and the team is in the advanced stages of negotiation for a number of other disposals to be completed in the next couple of months.

Darren Bear, the firm’s East Anglia’s corporate finance partner, said: “There was a noticeable drop in business confidence in the latter part of 2011 which has led to more cautious deal activity in the year to date.

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“However, here in East Anglia Grant Thornton has seen significant M&A activity over the past 12 months. This has been boosted by the shortage of quality assets on the market, so those that are on the market are attracting premium valuations.”

Recent deals completed by Grant Thornton East Anglia’s corporate finance team include the sale of Peterborough-based baby products retailer kiddicare.com to Wm Morrison supermarkets for �70m; the sale of another Peterborough-based company, business to business reseller of telecoms services Worldwide Group Holdings Ltd, to Daisy Group plc for �28m; and the acquisition of Pathway Care, the UK’s fourth largest independent fostering agency, by Acorn Care and Education Group.

Despite a general decline in UK M&A activity, the technology sector, which is particularly prevalent in the Cambridge region, has seen a consistent increase in deals since 2009.

Tim Hansell, Corporate Finance director at Grant Thornton East Anglia, added: “Technology firms in the UK will continue to attract private equity bidders in the coming months and attractive targets cover a diverse range of products.

“In Q1, Grant Thornton advised Cambridge headquartered Brady plc which provides trading and risk management software to the global commodity markets, on the acquisition of Norwegian firm Navita Systems AS and Swiss company syseca AG in transactions with a combined value of �18.3m.”