Southbank’s chief executive, Ewan Lloyd-Baker, confirmed to M&A that the company is negotiating with other businesses, but could not go into specifics.

“We’ve got a number of offers on the table at the moment, but… it’s a competitive marketplace out there in terms of finding acquisitions,” he said. “We’ve been talking to a couple of businesses that are off market, but we’ve also got a couple of companies we’re talking to where we are in an auction process. So it’s just a question of going through the process.”

Nevertheless, Lloyd-Baker expects at least one deal to complete before 2008.

Southbank is targeting niche engineering businesses that operate in the power generation and oil and gas sectors with a turnover of about £15 million-£20 million. In terms of consideration, the company is looking to pay anything from £10 million-£50 million.

London-based Southbank plans to retain the brands and identities of any businesses it acquires and only integrate at an operational level.

Lloyd-Baker: “They need to have the management team in place because we’re looking at building up a group of companies where Southbank is… the plc umbrella and we have autonomous businesses that are run by their [own] management teams.”

The company was an active deal maker in 2006, buying Luton-based engineering firm Hayward Tyler – which makes motors and pumps for the power generation industry – for £13.1 million on March 6.

In the same month Southbank also joined the Channel Islands Stock Exchange, becoming one of the few trading companies on the market. Pre-IPO, it raised £5 million.

Southbank is well placed for further acquisitions. The company returned to profitability in 2006, posting net profits of £1.4 million – boosted by contributions from Hayward Tyler – compared to a loss of £46,000 the previous year.

The firm also has debt facilities of £12 million that it can use for deals, according to chairman John May’s statement in Southbank’s results for 2006.

The desire to compete in an increasingly globalised marketplace is the main reasoning behind Southbank’s acquisition strategy and Lloyd-Baker hopes to see the business’ turnover grow to between £50 million-£100 million from its current £24.7 million

“There are companies such as Hayward Tyler out there that… need to have the scale behind them in order to develop new products and markets,” Lloyd-Baker said. “And if you’ve got a £15 million – £20 million turnover business sometimes that’s very difficult to do. If they’re part of a larger entity, it brings other skill sets to the table and that’s the raison d’etre for Southbank.”

In addition, Southbank is considering moving onto the Main Market or AIM to complement its CISX listing. “We are reviewing a number of options and, given that we are in effect on a main market, it may be that on the back of the next acquisition… we have a dual listing, maybe on the main exchange so we can increase [Southbank’s] exposure and allow some of the institutional investors to get on board as well.”