We sat down with PM+M corporate finance manager, Ryan Bilsborough, to discuss the increase in international interest in the Lancashire and North West M&A market in recent months, and what makes businesses here attractive to companies looking to build their presence in the UK.
Ryan explains further below…
In recent months, we have seen a number of multi-million-pound deals involving international buyers and Lancashire-based businesses following a somewhat lean period in the M&A world, with market consolidation, strategic expansion and capital infusion being the main factors for an increase in activity.
But what makes Lancashire attractive to buyers looking to build their presence in the UK, and the North West in particular?
Strategic location:
Lancashire and the North West are strategically located, offering access to major transportation routes and ports – we are two hours from London by train, linked to the rest of the UK by six major motorways, and to the rest of the world via Manchester and Liverpool airports. This geographical advantage makes it an ideal hub for businesses looking to establish or expand their operations.
Strong industrial base:
Lancashire’s leading international and national position in relation to aerospace, advanced engineering and manufacturing, energy, higher education institutions a thriving visitor economy make it a pivotal part of long-term economic growth. These industries often boast well-established businesses with a track record of innovation and profitability. Lancashire’s global reputation as an outstanding business location springs from our entrepreneurial flair, technical innovation, commercial know, outstanding business location and track record of innovation and industrial excellence.
Skilled workforce:
Lancashire is home to several prestigious universities and colleges, providing a steady pipeline of skilled talent for businesses. Companies looking to invest in the region often find access to a skilled and educated workforce advantageous.
Innovation and research:
The region has a strong culture of innovation and research, particularly in sectors such as advanced manufacturing (no. 1 in the UK), aerospace (no 1 in UK), biotechnology, and digital technology. Lancashire’s strengths to attract inward investment, to retain the best talent and unlock the area’s potential are being crystallised and supported by world-class, flagship projects backed by the LEP including UCLan’s £30m state-of-the-art Engineering Innovation Centre (EIC) in the heart of the Preston, and the Health Innovation Campus at Lancaster University.
Cost efficiency:
Compared to some other regions in the UK, the cost of doing business in Lancashire is lower, particularly when including factors such as property purchase and rental costs and wages. This cost efficiency can be an appealing aspect for companies looking to expand or optimise their operations.
What does the future look like for M&A deals in Lancashire?
We believe Lancashire is poised for an upswing in M&A activity, signalling an end to one of the leaner periods for M&A in a decade. Whilst the strength and speed of the recovery remain uncertain due to lingering macroeconomic and geopolitical challenges, we believe we have reached a tipping point. We expect a steady increase in M&A as the year progresses. Indeed, a flurry of deals in the past few months (as LBV have named) suggests that this rise in dealmaking may already have started in some sectors.
Dealmakers will still encounter distinctly altered conditions. Notably, while credit markets have loosened, financing comes at a higher cost than in the past decade. This increased cost of capital will likely exert downward pressure on valuations, demanding that dealmakers work harder to generate value. While we believe the ongoing uncertainty in the broader macroeconomic and geopolitical environment is reducing, dealmakers capable of assessing risks and strategising for various scenarios will achieve greater success contrasting with those awaiting clearer signals before proceeding.
Get in touch
If you are a business owner looking to carefully plan your exit strategy, our corporate finance team are here to help. Get in touch by clicking the button below to arrange a free, confidential meeting at any time, including evenings and weekend, to discuss your requirements in more detail.
