PKF Francis Clark has been ranked as the South West’s most active financial adviser in Experian Market IQ’s latest M&A Review.
The research, which analyses mergers, acquisitions and other deals worth over £500,000 during the first half of 2020, found transactions in the UK and Ireland were down by 36% overall on the same period last year, as the Covid-19 pandemic impacted on activity levels.
In the South West, 179 deals were recorded, with a total value of £5.46 billion. The volume of deals completed in the region declined by nearly 40% year on year, broadly in line with the national picture.
PKF Francis Clark topped the rankings of the region’s busiest financial advisers, after our corporate finance team helped to facilitate nine deals across sectors including energy, manufacturing, retail and IT.
These included Cornwall-based Kensa Group’s sale of a minority shareholding to Legal & General, paving the way for the ground source heat pump specialist to scale up and play a growing role in the UK’s green energy revolution.
PKF Francis Clark also advised on the sale of well-known caravan retailer Martins of Exeter to Autosleeper, as well as the sale of Devon company The Soap Kitchen to Candles.
Andrew Killick, corporate finance partner, said: “The last few months have been a difficult time for many people and organisations, but, despite the uncertainty that Covid-19 has brought to the country, there has still been corporate finance activity, and we have seen an increase in appetite for transactions develop recently.
“In particular, those quality businesses that have weathered and in some cases capitalised on this ‘new normal’ through innovation or product offering are keen to continue with growth plans, whether through an acquisitive strategy or fund raising activities. Additionally, we are seeing appetite from business owners to offer their management the opportunity to buy the business rather than pursue a traditional trade sale exit.”
On the impact of coronavirus on the South West market, Experian’s M&A Review notes: “Although deal making activity at the start of 2020 was on a par with previous years, the disruption of the Covid-19 pandemic saw the level of activity in Q2 drop by more than 50% in volume and 80% in value.”
The report adds: “In the days leading up to and into the lockdown period, South West PLCs raised more than £800 million through the capital markets, bolstering their cash reserves and strengthening balance sheets as the financial effects of the Covid-19 outbreak depressed the economy.”
Other deals PKF Francis Clark advised on included Dorset-based Decorum Vending’s £1.2 million equity raise with Cordovan Capital Partners to fund the vending machine provider’s expansion plans.
Looking to the future, Andrew said: “While there are certainly obstacles ahead, I am hopeful that businesses in the South West will continue to adapt and thrive, and the support of banks, private equity and alternative finance providers is critical to ensure this happens.”