Busy start to year for M&A deals in the North-East

Deals reached record levels globally in volume and value for the first quarter, according to Dealogic, the data provider.

Deals reached record levels globally in volume and value for the first quarter, according to Dealogic, the data provider.

The North-East contributed to the mergers and acquisitions (M&A) boom by recording its busiest start to the year for over a decade with 55 transactions completing, with disclosed deal values of almost £146m for the three-month period ending March 31.

Perhaps surprisingly, private equity was not responsible for such high levels of M&A. UK private equity market completions during the first quarter were at their lowest levels for three years, as reported by the Centre for Management Buy-out Research (CMBOR).

This followed a strong final quarter in 2006. The trend for low levels of private equity deal-making was reflected in the region, with little activity from venture capitalists. North-East companies were acquisitive during the period, with established plcs and newer companies to the market taking over companies both in the UK and abroad.

Vertu Motors, which listed on the Alternative Investment Market (AIM) in December last year, paid £40m for Bristol Street Group in March.

The acquisition, which was technically classed as a reverse takeover under AIM rules because of the size of the deal, will give Vertu 35 new and used car dealerships in England.

Northern Bear, which also listed on AIM last December, acquired Newcastle-based MGM, a provider of specialist services relating to the refurbishment of commercial and residential property and listed buildings.

Hargreaves made its fourth acquisition since listing on AIM less than 18 months ago, acquiring Maltby Colliery from UK Coal for over £21m. Maltby is one of the few remaining deep coal mines in the UK.

Arriva continued its expansion both at home and abroad with three acquisitions in the first two months of 2007.

Sunderland-based Arriva paid over £3.5m in total for the bus operators Esfera, based in Madrid, and Bosak, based in Prague. West Midlands coach operator Chase was acquired in February.

Two North-East companies listed on AIM during the quarter - the same number as listed during this period last year. Helius Energy and Neville Porter listed on the junior market in January and February respectively.

The North-East remained popular with overseas investors, with six businesses being acquired by both European and US companies.

Tor Coatings was acquired for the third time since it was founded in 1976; this time by US company RPM International. As predicted last year, the corporate finance market remained buoyant following a strong 2006. Although the private equity market in the region has had a slow start to 2007, this is not expected to be the case for the remainder of the year.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer