42 mergers & acquisitions


Hunt for growth in overseas acquisitions


Businesses are increasingly looking overseas for mergers and acquisitions (M&A) according to the latest Grant Thornton International Business Report (IBR), a global study that provides insight into the views and expectations of c-suite level executives at 12,000 businesses a year across 40 economies, write Wendy Hart, corporate finance partner, and Duncan Lamb, corporate finance partner, of Grant Thornton


The results the latest IBR report show are that of those companies seeking to expand through acquisition in the next three years, increasingly they expect to do so through a cross-border transaction with 33% of respondents seeing this as the most likely scenario.


Furthermore, the report reveals that the proportion of businesses seeking to grow through M&A, be it overseas or within their own market, has risen steeply over the past two years from 26% in 2010 to 34% in 2012.


These findings all point to the fact that despite the on-going global economic challenges business appetite for M&A has improved markedly over the past 24 months.


Naturally, domestic M&A remains high on the agendas of business leaders but the upswing in interest in overseas expansion is encouraging, and no doubt reflects the particular market conditions within individual regions globally.


Globally, the IBR reveals some interesting regional variations. The regions most interested in making an acquisition in the next three years are North America (37%), UK & Ireland (36%) and the BRIC (Brazil, Russia, India and China) economies (35%). This compares to only 28% in mainland Europe and 25% in Asia Pacific and also particularly companies in the troubled economies of Greece, Ireland and Spain, where only 16% indicated an interest in M&A activity in the coming three years.


So although the Eurozone is less optimistic about the growth prospects of its own economies a large proportion of businesses within Europe are actively seeking opportunities abroad and expanding into higher growth markets such as the BRIC economies.


Following the financial crisis of 2008, the flow of economic power


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from ‘west’ to ‘east’ has undoubtedly sped up.


It is therefore encouraging


that enterprising corporates in mature markets appreciate that M&A remains a vital strategic tool to enable them to benefit from these trends.


Grant Thornton's corporate finance team in the Thames Valley is continuing to complete transactions, including a number for businesses with significant levels of international activity and international expansion strategies, a flavour of these being as follows:


SGX:


Grant Thornton advised Baird Capital and the MBI team on the £15 million acquisition of the Instrumentation Solutions business of e2v technologies plc. The acquired businesses have been re-named SGX Sensortech.


Tessella:


Grant Thornton advised the shareholders of Tessella on the sale of the business to its management team supported by Mobeus Equity Partners. The transaction enables the founder, Kevin Gell, to move away from day-to-day management while retaining a key position within the business and on the board.


Real Time Health:


Grant Thornton advised the shareholders of RealTime Health, the supplier of patient flow software, on the sale of the business to Allocate Software. RealTime’s software is used to improve patient care and financial performance by improving clinical processes which in turn lead to reduced average length of stay and increased inpatient capacity.


The full IBR 2012 M&A report is available at: www.internationalbusinessreport.com/ Reports/2012/


THE BUSINESS MAGAZINE – THAMES VALLEY – SEPTEMBER 2012 Duncan Lamb Wendy Hart


Details: Wendy Hart 01865-799938 wendy.e.hart@uk.gt.com


Details: Duncan Lamb 0118-9839612 duncan.lamb@uk.gt.com


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