Growing numbers of US investors are looking to buy companies in the UK, after the vote in favour of Brexit failed to trigger a slump in the number of corporate transactions, according to one of Yorkshire’s best known dealmakers.
Ian Marwood of Sentio Partners said his firm had played a role in eight major deals since the UK voted to leave the European Union, including the sale of manufacturing firm Malosa Medical, which is based in Elland, West Yorkshire, to the US-based company Beaver Visitec.
Mr Marwood, who has spent 30 years in the merger and acquisitions market, told The Yorkshire Post: “Our initial reaction after the (EU referendum) vote, was one of concern, and that we would see a hesitancy to invest in the UK by overseas players, and also that the uncertainty within the UK might cause a significant downturn in the number of deals.
He added: “We’ve not seen that. We’ve had a large number of businesses that we’ve sold to international buyers, particularly from the US.
“The currency probably helps that to an extent, but certainly there has been a confidence on the part of US buyers who are investing into the UK.
“On the buyer side work we’ve been doing, we’ve acted for a number of overseas buyers who were acquiring assets in the UK, and generally I wouldn’t say that Brexit is high on their list of issues and concerns when they’re looking at these businesses.”
Mr Marwood, who joined Sentio in 2013, has advised on a number of deals in Yorkshire over the last decade, including the £350m sale of Dean Hoyle’s Card Factory to private equity giant Charterhouse in 2010. Sentio Partners was established in January 2012 by the former partners and employees of BTG McInnes Corporate Finance.
“If you look at 2017 alone, we had two or three big international deals,’’ said Mr Marwood. “If you’re selling a business it’s highly likely that international players will feature prominently on the buyer lists.
“To sell a business to an international player, it (the business to be sold) doesn’t have to be huge,’’ he said. “What it has to have is an interesting product, an interesting market and some sort of intellectual property, so an international buyer says, ‘That would give us a great platform, or it would be a great bolt-on that would give us access to particular markets that we want to expand in.’
“Really our job is to make sure that, for which ever company we’re acting for, we’re understanding and honing the proposition we make to a buyer.
“We’re putting forward to them a reason why they should be really interested in this company we are selling.
“We will spend a lot of time getting to know the people and also the business itself, and what drives the business; what the revenue model is, what the risks are and what the problems in the business are.
“We want to be one step ahead of a buyer. We want to know the answers to the questions, before the questions are raised.
“We will take our time to make sure we understand that business inside out.”
Mr Marwood acknowledged that there are some areas where the uncertainty of Brexit will cause a problem.
He added: “The retail sector is a bit of a concern at the moment.
“There are a lot of businesses going under. There are some fundamental problems in some businesses there.
“The advantage we have is that the sorts of businesses we look at tend to have some qualities about them which means that Brexit doesn’t necessarily have that big an impact.
“We’re looking at businesses that have got strong products sets, strong skills sets and strong management teams. They are addressing strong markets. Those are the businesses that we tend to gravitate towards.”
OVER the past 15 years, the team members at Sentio Partners have led more than 250 transactions, covering all forms of corporate finance.
These transactions have ranged in size from £1m to £350m across a range of sectors. Recent deals have included the disposal of Kimberly Rentals Group to AFI.
Ian Marwood has spent 30 years in the merger and acquisitions market in Yorkshire, London and Prague.
He joined Grant Thornton in 2002 to help build its corporate finance presence in Yorkshire. He joined Sentio five years ago. *
Mr Marwood said Leeds-based Sentio, which has five partners, had no current plans to open offices elsewhere in the UK.