North West M&A market “Picking up massively”

The M&A market in the North West has "picked up massively" since Covid-19 lockdowns ended and the same is expected in 2022.

North West M&A market “Picking up massively”

Neil Mitchell, partner at Manchester-headquartered Rickitt Mitchell, said in terms of volume and value of transactions, the deals market across the whole of the UK has been buoyant for more than a year.

Mitchell said the North West specifically has "accelerated at an impressive rate". 

North West M&A market “Picking up massively”

He noted that certain sectors have outperformed the rest, with technology assets "undoubtedly" leading the way, with ecommerce being a notable area, where companies with a strong online infrastructure are benefitting. 

"As an example, we recently advised North West based high end audio and home cinema online retailer, AV Online, on its sale to AIM listed Gear4Music", he said.

"The deal is set to create a leading ecommerce group servicing the growing £400m UK audio visual market, which at the top end of the market is still very fragmented. It is a powerful move combining AV Online’s specialism  with Gear4Music’s infrastructure and European reach.

"Somewhat independent of the pandemic, businesses that have a circular economy element are also proving attractive to investors".

"We saw this reflected in our recent work with certified pre-owned watch specialist Xupes on its strategic partnership with global marketplace Chrono24. With the market much more receptive to sustainable options, the term 'pre-owned' has gone from a somewhat undesirable trait of a product to an accolade, and investors have taken notice."

Looking ahead, Mitchell said the firm's current pipeline suggests the activity it has seen in 2021 is set to continue, with a "strong appetite still being shown by private investors and public markets". He said this sets the business in good stead for the year ahead, although in a word of caution, Mitchell said the "buoyancy of the market can't continue forever". 

"Yes, there is a lot of money yet to be deployed by private equity especially, but we need to see counterparties continuing to want to buy or sell," he said. "For some, we have seen issues arrive as a result of Brexit, or prolonged uncertainty post-Covid, meaning they aren’t in the strongest position to sell. 

"Our aim for Rickitt Mitchell remains the same – to continue to be at the forefront of dealmaking in our target markets. We are always looking for high quality transactions and exciting entrepreneurs to work with."

Mitchell went on to pay tribute to Kaine Smith for the recognition he received at this year's Insider North West Young Professional Awards.

He said: "The whole team is incredibly proud of Kaine. The award win was well deserved and is an accurate reflection of his strong dealmaking track record, inclusion into the leadership team, as well as his mentoring with the rest of the group. 
"Since joining the firm in 2012 as a newly qualified accountant, Kaine has demonstrated an exceptional level of drive and tenacity that has seen him rise to become a board member and shareholder in just seven years. He plays a fundamental role in shaping the direction and strategy of the firm, so it was excellent to see his hard work recognised at this year’s Insider North West Young Professional Awards."

Now Mitchell aims to have another "excellent" year of deal making in 2022, which he "suspects will be the case".

"I'm also keen to say that we’ve had more in-person interaction with our clients and the wider corporate finance community," he added. 

"Virtual working serves a good purpose, but nothing rivals building connections in person and networking with the world-class business community we have here in the North West and Yorkshire.”