A year of two halves

M&A’s Mark Dunne reports on the £255 million deal that rapidly turned into a worrying statistic

M&A’s Mark Dunne reports on the £255 million deal that rapidly turned into a worrying statistic

Neil Partridge spent 12 years building Ainscough Crane Hire into a major player in its market. The crane hire specialist’s managing director has overseen countless acquisitions that have transformed the business.

Today the company, which is based in Standish, near Wigan, employs 1,000 people across its national network of 25 depots. It provides a fleet of 500 mobile cranes to clients, such as Amec, Laing O’Rourke, Shell and BP.

But for Partridge leading the company was not enough – he had to own it. So in October last year he became chief executive after leading the existing management team in a £255 million buy-out from the family that established the business in 1976.

Partridge said the buy-out gave management the funding and control it needed to continue to grow the business.

Happy days

The deal was backed with debt and equity provided by Bank of Scotland Integrated Finance, which was arranged by director Colin James. “This transaction represents an opportunity for us to invest in a company with growth potential and to support the management team in their aspirations to develop the business,” James said. “The deal is yet another example of the northwest’s booming deals market.”

James’ comments have been supported by statistics released by the Centre for Management Buyout Research, which show an increase in the value of individual deals in the region.

In 2007, the average deal value in the northwest was £33 million, taking the overall value to £2.49 billion. The previous year’s figures show that the average deal was worth just £25 million, with completed transactions totalling £2.33 billion.

In total, nine deals worth more than £100 million reached completion compared to six in the previous year. The largest deals in the northwest included the £486.4 million public-to-private transaction of support services specialist Enterprise as well as transactions involving DIY group Focus and Liverpool Football Club.

Coming down

The Ainscough buy-out may have been a big deal for the northwest, but it became the only £100 million-plus deal to close in the last six months of 2007 as the impact of the credit crunch started to bite. Further evidence of a slowdown in the second half was that there were only three £50 million-plus deals compared with seven in the first six months.

Deloitte’s head of corporate in the north, Paul Lupton, said: “Overall, the northwest had a successful 2007, completing fewer deals at substantially higher values than the previous year.”

But he did concede that the appetite for deals at the smaller end of the market waned in the final months of the year.

Barclays Private Equity director for the northwest, John Walker, added that he is not worried by the second half of the year’s figures. “Although it could be perceived that the so-called credit crunch is beginning to ripple into the northwest, we are still seeing plenty of high profile, high value deals.”

Walker highlighted other findings that backed his argument that the market remains strong with the continuing popularity of secondary buy-outs. There were 16 of these types of deals in 2007, compared to just five in 2000.

“We have also seen the lowest number of distressed debt investments since 2000,” he added. “In summary, we anticipate 2008 will be a positive year for the northwest.”

This optimism has been supported by research released by Barclays. Some 25 per cent of businesses in the northwest it surveyed said mergers and acquisition would have the greatest impact on boosting competitiveness in 2008.

The survey also states that 73 per cent of firms questioned in the region are planning to make mergers and acquisitions or management buy-outs this year.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

Related Topics