More East Midlands firms are seeking acquisitions

Posted on August 12th, 2015

Andy Parker
More firms in Nottingham, Leicester and Derby will be investing in acquisitions over the next 12 months and focusing on growth, says new research by business advisory and accountancy firm PKF Cooper Parry.

At a seminar which brought together more than 80 East Midlands’ financial directors, the firm collated survey results from attendees which questioned them on growth, investment, incentivising and recruiting staff and confidence in the market.

Andy Parker, Corporate Finance Partner at Cooper Parry, said the survey results were particularly interesting with regards to the responses about plans for acquisitions.

He said: “A fifth of the attendees who answered our questionnaire indicated that they were considering investing in an acquisition.

“This is a sign of renewed confidence in the market. Committing funds to making an acquisition is a strong statement of desire and intention to maximise growth. Acquisitions are inherently risky, but the confidence seen in this survey suggests that people are prepared to balance those risks against the rewards of realising even stronger growth.

“It also shows that East Midlands companies are just as positive as firms elsewhere in the UK – be that London or the South East – in looking to expand quickly.”

The benefits of an acquisition are far reaching, added Andy.

“Growth, scale, efficiencies, new products, new services, IP, additional profits, use of leverage in the deal to reduce the cost of capital through the current relatively cheap and readily available debt, repositioning in the market – these are all benefits which East Midlands companies will reap from an acquisition. And more and more of our clients are choosing this route for expansion.

“We are currently working with manufacturers, IT services businesses, retailers, financial services companies, all looking to make acquisitions,” he said.

Andy highlighted another key theme from the survey as a predicted rise in investment in capital equipment.

He said: “Forty-four per cent of respondents said they were looking to invest significantly in capital equipment.

“As growth is coming back into the economy, companies are seeing the opportunity to invest to maximise that growth. The East Midlands is a broadly-based economy and the fact that nearly half of all respondents are seeing such growth opportunities demonstrates that the return to growth is broad and strong.”

Jon Earl, investor at the Business Growth Fund, who spoke at the seminar added: “At BGF we are currently seeing a strong appetite for companies selling equity capital for growth purposes including acquisitions, capital investment, internal expansion and personnel increase – which reflect the findings of PKF Cooper Parry’s survey.”

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