More acquisitions and mergers on the cards

Alex Mardapittas, CEO at EMSc
Alex Mardapittas, CEO at EMSc
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After years of subdued activity, coffers at home and abroad are being prised open as companies go on the acquisition trail in Sheffield City Region.

At the same time, a slew of businesses have secured development capital to meet ambitious growth targets as the economic picture improves.

Steve Bell, head of corporate finance at business advisers Hart Shaw, said there were 59 deals in the Sheffield and Doncaster postcode area listed on the Experian Corpfin database between July and December.

They included 26 acquisitions, 11 for development capital, six restructures and five management buy outs.

The majority - some 26 - included cash, 13 used bank debt and 10 included venture capital.

Steve said: “The deals show that many companies are using cash generated from operations. This reflects our opinion that many buyers are taking advantage of cash reserves to secure assets at a discounted value.

“Cash on completion is a compelling argument for any vendor.”

His views were echoed by Patrick Abel, corporate finance partner at BDO Sheffield office.

The company was involved in deals in which three Sheffield companies secured development capital: Anchor Magnets, Benchmark Holdings and EMSc, which secured a massive £3m loan from the Royal Bank of Scotland to support its aim to become a £60m company in the next five years.

The Sheffield office also worked on six due diligence exercises for Regional Growth Fund grant applications in the latter part of 2013.

Patrick said: “It is great to see tangible signs of growth returning to the region and in such diverse businesses.

“Private equity firms are increasingly targeting the region and have identified advanced manufacturing as an area to target. A mixture of renewed optimism, the relaxation of funding lines and opportunistic buyers should fuel mergers and acquisitions in 2014.”