Rise of "Brand Yorkshire" boosts the region

'‹'‹The Tour de Yorkshire is only a couple months away. The rainbow of jerseys that will stream through our county is a vivid reminder of the incredible strides that Yorkshire has taken to build its international profile in recent years. For our regional business community, the rise of '‹"B'‹rand Yorkshire'‹"'‹ has played its part in creating a thriving hub of cross-border deal activity.

Tour de Yorkshire. The men's race passes All Saints Church in Sherburn-in-Elmet. Picture : Jonathan Gawthorpe

Some of the best evidence for this can be found when helping a local business look for external investment. In our experience, there will almost always be some overseas interest if a quality Yorkshire-based business goes to market.

Of course, the crash in the value of ​sterling 18 months ago is still having repercussions. Quite simply, acquisitions and investments into the UK have become much more attractive for international firms. Often, a business buying in US ​d​ollars or ​e​uros, for example, can pay one to two turns of earnings more than a local rival.

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The trend is supported by a general sentiment that the UK is a safe place to invest. The Northern Powerhouse agenda has provided some assurances of the Government’s commitment to the economic future of the region. But, locally, the favourable profile of Yorkshire, its reputation as a great place to live and work and full of talented and industrious people, has also helped that cause tremendously.

Crucially, international buyers see the region, and the UK, as a great platform to access British ingenuity, know-how and brands that they can leverage in their own domestic markets. Equally, these deals offer international firms a chance to make sure that they have operations on both sides of the Channel, post-March 2019.

We’ve seen a whole host of Yorkshire businesses attract interest over the past year. Recent deals include the £40m acquisition of Pollington-based garden landscape business Kelkay by the US-listed Griffon Corporation and the acquisition of Ossett-based Dale Hardware by Swedish manufacturing group ASSA ABLOY.

These follow some headline transactions last year, including that of Pontefract-based Butterkist by German snack food company Intersnack and Linpac by Klöckner Pentaplast Group, and Hull’s Chaucer Foods by Japanese firm Nagatanien, as well as Nestlé’s joint venture with R&R in Leeming Bar.

Beyond these, even the transactions that go to British buyers will have had at least three or four expressions of interest from abroad.

Of course, business leaders in Yorkshire have long known the quality of their enterprises. An encouraging mixture of positive market conditions have helped foster that confidence and turn it into real international ambition.

As such, an international reach is increasingly part of many local businesses’ strategies. Yorkshire businesses are selling their products abroad and taking advantage of the price comparative advantage for those with domestic production capabilities.

But, there are motives beyond simply foreign exchange ratios. Local and national growth rates for many markets are now simply not enough to satisfy stakeholders. The growth rate in the UK has been steady for several quarters, but is anything but stellar. Management teams are faced with a clear choice of treading water, or looking to diversify or access other growth markets that can drive the business harder. Often, that doesn’t just mean finding a new sales channel, but can be through acquisitions too.

We’ve seen that with the likes of Wetherby-based Proactis after it merged with Perfect Commerce. The transaction launched it into the thriving US and French spend management markets and made it into a top five global player. Elsewhere, Animal​c​are in York acquired Ecuphar, which offered access to Benelux, Spain and Italy.

Local businesses have benefited from Yorkshire’s growing profile. The increased level of M&A activity and inbound interest also reflects the connected world we now operate in. Management teams are buoyed by the fact that a business based in Yorkshire has as much chance of finding an investor or buyer from Houston, Hong Kong or Helsinki as one in London.

No doubt, the fluctuations of global exchange rates, the bob and weave of political uncertainty and market conditions will have a role in shaping M&A activity in the coming months. But, I’m sure that Yorkshire businesses that are world class can now access the global stage that they deserve.

With the right mindset and groundwork, any Yorkshire business has the opportunity to break away from the peloton.