Private equity activity is set to boom in the East Midlands, as corporates set their sights on ambitious growth and see private equity as an increasingly suitable way to raise finance, according to experts at accountancy and business advisory firm BDO LLP.
BDO, which has already completed two private equity deals in the first quarter of this year, is seeing an increasing appetite from corporates in the region looking for private equity investment. The firm says it has a healthy pipeline of deals to come during the course of the year.
BDO has recently provided financial due diligence to Maven Capital Partners and Lloyds Acquisition Finance in support of the MBO of Leicester firm, E.E. Smith Contracts Limited and Clarendon Fabrications Limited, both previously under common ownership.
John Bryant, Head of M&A East Midlands at BDO, comments: “As business confidence and the economy continue to recover, firms have ambitious growth plans of which private equity is becoming an increasingly prominent part of the equation. We recently hosted a dinner with regional business leaders and spoke with a significant number that are looking to access funds through private equity investments.”
He adds: “The PE community is becoming increasingly well established in the East Midlands. You have a number of top quality firms, including LDC, BGF and Foresight that have cash to invest and are keen to do deals with local businesses. The most attractive targets are those that are trading – or have the ambition to trade – in international markets.”
Activity in the East Midlands is in line with UK-wide trends. According to the latest PCPI/PEPI* analysis from BDO LLP, 2015 ended on a high with 642 deals and the highest deal volume since before the recession. The first quarter of 2016 saw a slight drop to 629 deals but still reflects a strong and active M&A market despite a backdrop of global instability and Brexit uncertainty.
The PCPI/PEPI* index, which tracks multiples paid by trade and private equity buyers for private companies, saw both trade (10.3x) and private equity (11.5x) prices increase.
