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‘Good Businesses In Strong Position’ Despite Fall In Yorkshire M&A Activity

Corporate Specialist Analyses Latest Figures


A corporate specialist at Irwin Mitchell has revealed that opportunities remain for ‘good’ businesses to take advantage of current economic climate, despite new research showing a fall in mergers and acquisition (M&A) activity across Yorkshire in the first quarter of 2012.

Figures compiled by Experian Corpfin have revealed that the total number of deals fell by 25 per cent across between January and March in the region, with total deal volumes across the UK falling by almost 20 per cent.

The total value of deals in Yorkshire for the period stood at £322 million, which was significantly lower than the figure of £1.45 billion recorded in the same quarter in 2011.

According to Paul Johnson, a Leeds-based Partner in Irwin Mitchell’s Corporate team, the availability of finance could be impacting on the figures. However, he added that opportunities are still emerging for some firms.

He outlined: “We are continuing to see reluctance from Banks to provide the funding required to push an increase in deal volumes.

“Much of the funding presently provided is limited to the renewal of existing facilities. As a result, the structure of deals is evolving and we are seeing an increase in the number of transactions with deferred consideration and earn-out mechanisms, together with an increase in joint venture arrangements.

“There is, however, still scope for good businesses to achieve attractive multiples on a sale and we are still seeing a steady flow of new instructions.”

Figures from Grant Thornton have also shown a drop in M&A activity, although the research also indicated that private equity deals remain at steady levels.

On this point, Adrian added: “Regional private equity funds remain willing to step into the breach to fund transactions and we have been engaged on behalf of companies and funds on a number of occasions this year to act on transactions with a private equity element to them.”