Fri, 21 Jul 2017
MERGERS and acquisitions have transformed the local business landscape in recent years, but apart from helping a handful of local entrepreneurs join the ‘Millionaires Club’, what’s in it for the rest of us?
According to analysis by Kingsclere business sale advisor BCMS, between 30 and 50 West Berkshire businesses are involved in joint ventures, fundraising, mergers, acquisitions or management buyouts every year.
While high-profile corporate mergers are often associated with cost-cutting and redundancies, at a local level the opposite is true, and the vast majority of acquisitions actually create jobs and investment.
For example, Marshall Motor Group took over the Ridgeway car dealership last year, and is well under way with the construction of its new Jaguar Land Rover showroom at Greenham Business Park, which is expected to employ 100 staff.
Private equity firm HIG Capital bought Newbury’s Kennet Shopping centre in January 2016, promising “hands-on asset management”, and is focused on increasing the town’s leisure offer – creating new jobs along the way – with new restaurants, and possibly a gym or trampoline park.
Significantly, Swiss chemicals giant Sulzer acquired Newbury industrial glue-gun maker PC Cox for £16m. The deal has been positive for the company and the local area.
After moving PC Cox from Turnpike to larger premises in Hungerford, Sulzer recently announced it is closing a factory in Denmark and moving production to West Berkshire.
Elsewhere, major local names, including Microfocus, Kerridge and Stryker, have also made multiple UK and US acquisitions to grow faster and offer new services to customers, ensuring they remain key employers in our local economy.
While some people may have concerns about the accompanying loss of independence for local businesses, in reality an acquisition by a larger group often presents staff with better training, new incentives, and promotion opportunities that a standalone business cannot offer.
Even if a change of hands means back-office functions are centralised elsewhere, this too frees up local talent to join other local companies.
Our geography also plays a key role in many of the local transactions. After spotting a gap in its national coverage, logistics group Palletforce acquired Greenham haulier QTR Transport last year.
Meanwhile, several local legal and accountancy firms have recently joined forces with larger groups who are looking to increase their local market share.
Although the Thames Valley remains a hotbed for these kind of deals, BCMS is also seeing similar trends across the country.
Taken together, mergers and acquisitions should be seen as a win-win for everyone.
Owner-managers get to move on to new ventures, local business growth accelerates, and local jobs are safeguarded or created.