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I want to find the weather for in .

Appetite remains strong for cross-border M&A – Deloitte

Posted by Mel Hill on 13th February 2018

Investments by North West companies in overseas assets remained stable last year, with 32 transactions completed in the last 12 months, according to Deloitte, compared to 33 in 2016.

The business advisory firm’s latest Cross Border Deals Radar, conducted in partnership with Experian reveals that total deal value rose to £3.12bn in 2017, more than five times the amount seen the previous year. However, this was largely due to the £2bn acquisition of cosmetics manufacturer Carver Korea by UK giant Unilever. The Merseyside-based business was particularly active during the course of 2017, completing seven overseas acquisitions across Asia, South America and the US.

Interest in UK-based assets also remained strong during 2017, with 52 transactions completed worth a total of £1.36bn. Transaction volumes saw a slight rise on the previous year, which saw 50 deals valued at £1.75bn.

The largest investment saw Dutch testing company Element Materials Technology acquire Salford-based Exova Group in a transaction worth £620m. There were also transactions valued in excess of £100m for Cumbria-headquartered NuGeneration and NorthEdge-backed Utiligroup, which completed sales to Toshiba and Energy Services Group respectively.

Appetite remained strong in the healthcare sector, with the £30m acquisition of Baywater Healthcare by French medical equipment rental company Baside Le Confort Medical the largest seen during the year. This was one of nine cross-border deals seen from the sector over the course of 2017.

Transactions with the US remained by far the most popular for UK companies, with 27 of the 84 involving either an American target or buyer. Behind this, Germany saw nine, Singapore completed eight, while seven transactions were completed in the Republic of Ireland and the Netherlands.

Nationally, US buyers acquired 156 UK companies in the second half of 2017, down 13.8% on the 181 deals done in the second half of 2016. However, interest remained strong from UK buyers in the other direction, with the UK acquiring 109 US companies in the second half of 2017, up 23.9% on the 88 deals done in H2 2016. This trend is reflected over the full year, with US acquisitions in the UK down 11.3% but up 21.3% for UK acquirers over in the States.

Olly Tebbutt, partner at Deloitte in the North West, said: “Companies in the North West have continued to recognise the opportunity posed by acquiring overseas assets, and the need to establish and consolidate an international base with Brexit on the horizon. As the data shows, this is equally true for global companies like Unilever as it is for our SMEs, and we expect to see continued interest from businesses of all sizes in the coming months.

“The appetite from international investors also remains strong, and it is encouraging to see activity across a broad range of sector areas. In the last 12 months, we have seen deals range from manufacturing and life sciences to consumer and real estate, underlining the attraction of North West brands in the global market.”

Paul Maddison, director and healthcare M&A expert at Deloitte in the North West, said: “With the North West playing host to several science parks and centres of excellence containing some of the most innovative life sciences and healthcare businesses, it is unsurprising to see such a high level of interest from overseas investors.”

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