Belfast Telegraph

Number of corporate deals rises but value stays low

By Margaret Canning

Northern Ireland is one of just three UK regions to show an increase in the volume of corporate deals in the first six months of the year, research has shown.

The number of mergers and acquisitions, venture capital injections and other deals was up 12% in the first six months of 2012, according to global information company Experian.

That was outdone only by the south west of England, where the number of transactions grew 17% to a value of £52.7bn.

Experian said that the Northern Ireland deals were worth £691m - nearly three times the £232m value of transactions in the first six months of 2011.

In third place was Scotland, where transactions were up by 3% to a total worth of £10.8bn.

Yet despite Northern Ireland's increase, it was the second worst of 11 regions for the value of transactions, with only England's north east coming in lower at £464m.

Two deals alone in Northern Ireland accounted for over £475m. Schrader Electronics was sold for £316.6m to a private group led by Madison Dearborn Partners.

Hermes Real Estate Investment Management paid £159m for the remaining 50% of three shopping centres - including Belfast's CastleCourt - in which it formerly had half-shares.

Ian Coulter, managing partner of Tughans Solicitors and a specialist in mergers, acquisitions and private equity, said that the data showed some key trends.

It was not because companies were weaker in the downturn that they became attractive.

"A lot of the companies being taken out have a good market dominance," Mr Coulter said.

He added: "The venture capital space at the level of above £1.5m involving Great Britain funds is in reasonable health, but below that is not so good.

"Secondly, where they can do so, Northern Ireland companies are going into new territories - for example, Co Tyrone-based Westland Horticulture's takeover of Cranswick Pet Products in England. Companies that can invest are investing outside Ireland.

"But where Northern Ireland companies are being taken over - such as Isaac Agnew - they are more often than not being taken over by international companies."

Isaac Agnew was sold for an undisclosed sum to Sytner Group, part of US Penske Automotive Group, while Londonderry-based Opt2Vote was bought by IDOX in England for £3.5m.

For £6.7m, UTV acquired Dublin social media specialist Simply Zesty and Ulster Farm By-Products - part of Glenfarm Holdings - was sold to Sapi SpA in Italy for an undisclosed sum. Phoenix Supply was also snapped up by Airtricity - part of Scottish energy giant SSE - for £19.1m.

And in venture capital, Antrim-made fake tan brand Vita Liberata received a cash injection from Irish fund Broadlake Capital. Mr Coulter, who is also chairman of the CBI in Northern Ireland, added: "There is activity going on, but it's very different to the market five years ago.

"The levels of businesses in Northern Ireland buying other businesses in Northern Ireland have significantly reduced.

"Confidence in likely consumer demand in Ireland in the short to mid-term isn't there, partly because of austerity measures north and south." The figures from Experian do not include the June purchase of Fleet Financial by Charles Hurst, part of Lookers PLC.

Tughans have acted in a number of the deals mentioned in the report, including the venture capital deals involving Antrim tan brand Vita Liberata and the acquisition of Ulster Farm By-Products by Sapi SpA.

Just what were the big deals in Northern Ireland in the past six months?

  • January 12: Sytner Group, England acquired Isaac Agnew for an undisclosed sum
  • January 12: DeskStream Inc in the US acquired WorldDesk Ltd, sum undisclosed
  • January 18: Workspace (Enterprises) Ltd in Northern Ireland acquired Therm Tech Ltd in England, sum was undisclosed
  • February 15: Hermes Real Estate Investment Management, based in England, acquired three shopping centres, including CastleCourt: £159m
  • February 23: Beacon Trading in England acquired Beverage Plastics, Northern Ireland for undisclosed sum
  • March 6: UTV Media plc acquired Simply Zety in Dublin: £6.7m
  • March 15: Madison Dearborn Partners led an investor buy-out of Schrader Electronics for £316.6m
  • March 27: IDOX Plc in England acquired Opt2Vote in Derry for £3.5m
  • March 28: Vita Liberata received development capital from Broadlake Capital
  • April 10: Kelway in England acquired Business and Scientific Services in Northern Ireland for an undisclosed sum
  • April 13: Westland Horticulture in Northern Ireland acquired Cranswick Pet Products in England for £18m
  • April 18: Seven Technologies received development capital of £6.6m
  • May 16: Airtricity acquired Phoenix Supply for £19.1m
  • May 28: Internet Central in England acquired JSR Technology in Northern Ireland for an undisclosed sum
  • May 30: Fivemiletown Creamery acquired Causeway Cheese Company for an undisclosed sum
  • June 2: Xperience Group acquired DMC Software Solutions for an undisclosed sum
  • June 6: Sapi SpA in Italy acquired Ulster Farm By-Products for an undisclosed sum
  • June 11:AMP Capital in Ireland led an investor buy-out of Eco Wind Power: £161.6m
  • June 12: Pallas Foods in Ireland acquired Crossgar Food Service, for an undisclosed sum