Private equity group looking to back small businesses in North

The Riverside Company, whose global portfolio includes 74 companies in Europe, North America and the Asia Pacific region, targets the lower end of the mid-market.

Speaking to the Yorkshire Post, Martin Scott, partner, said: “We’re going to deploy significant amounts of capital to back management teams and businesses, and not just one or two, we are going to try and invest strongly (in the North) over the next coming years.”

Mr Scott said that he is “bullish” about the future prospects of strong, British brands, adding that Britain itself has “a fantastic cache” in both North America and China. The firm has been active in the UK market since 2005, but didn’t open an office in London until 2011. It has three current portfolio companies in the UK – DF King Worldwide, Summit Medical and Tensator.

The private equity industry in the North of England is going through a resurgence with £750m of funding available to back small and medium-sized businesses with growth potential, the Yorkshire Post revealed last month.

Northern-based buyout firms Endless, Palatine and NorthEdge alongside the new Business Growth Fund and Lloyds Development Capital have £500m worth of private equity capital to invest in deals in the North over the next two to three years, according to BDO. Banks are expected to provide an additional £250m to support the right deals. “Markets are recovering, the economy is recovering and we think the time is absolutely right to be doubling down our efforts in the UK,” said Mr Scott.

He said: “The kind of thing we are looking for is businesses that have an international flavour to them or could have an international flavour.

“A manufacturer who might be making clothes, sports equipment, pieces for cars, that can go international because we think we can help them do that.”

He said that the Riverside Company is attracted to the North’s “good management teams, fantastic work ethic, great history of manufacturing and production that can be translated into high quality niche manufacturing and terrifically gifted entrepreneurs”.

Mr Scott added: “There’s some great people, some great teams who are really hungry to get out there and can compete on an international stage if they have the right backing.”

The Riverside Company is focused on investing in growing enterprises valued at up to 250 million US dollars.

“We are pretty unusual in that very few international firms with our kind of international infrastructure and reach would focus on very small deals,” said Mr Scott.

“In the PE (private equity) world, lots of people would go for huge, big leveraged buyouts especially on the international scale, but we don’t do that, we focus on small businesses because we think they are very different to large businesses and we think there’s a particular class of small business that would benefit from working with us.”

As of the first quarter of 2013, the Riverside Company had assets under management of 3.5 billion US dollars. In 2012, Riverside invested more than 327 million US dollars in 36 developing enterprises worldwide.

It said that 25 of these were valuable add-on acquisitions. Fourteen exits took Riverside’s total annual transactions to 50. Worldwide, the firm has more than 200 employees, across four continents.

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