A prosperous year

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Investors and advisers in the northeast have enjoyed a prosperous year of deal making and look forward to more success in the next 12 months. Mark Dunne reports.

In May, two managers at a Tyneside electronics design and contract manufacturer decided to buy their business after the company’s parent, electronics giant Mitsumi, planned to close the plant and refocus its global operations on component manufacturing.

To help them put a deal together, finance director Ian Walton and sales manager Phil Nelson approached the corporate finance team at chartered accountant Tait Walker. The accountancy firm subsequently negotiated terms of a buy-out and raised a funding package from regional development agency One NorthEast and the business development team at South Tyneside Council.

The successful completion of the deal enabled the Jarrow-based business to continue focusing on the design and manufacture of bespoke systems for the automotive and industrial sectors and saved more than 50 jobs in the process.

Today the acquired business trades as Summit 1 Technology with Walton as its managing director and Nelson as head of commercial. They now plan to take on more staff in the next three years with its turnover projected to increase to £8 million a year from £5.5 million.

The Summit 1 buy-out was just one of more than £75 million worth of deals that Newcastle-firm Tait Walker’s corporate finance team advised on in the second quarter of this year.

Others included advising Durham-based Sherburn House â“ a charity that provides residential care and sheltered housing to the elderly â“ on the sale of Skill Training, a provider of training qualifications and apprenticeship programmes.

It also assisted long-standing client Paul McKie on the sale of Ravensworth Digital Services to Tangent Communications plc for an undisclosed sum.

June was also a good month for the firm where it carried out a due diligence report for Washington-based Canford Group plc to prepare for its acquisition of computer components and accessories retailer Ash Distribution. It also acted for landscape and urban design company Insite on its sale to environmental and engineering consultancy SLR Consulting.

Tait Walker partner Michael Smith said the firm’s pipeline of quality deals has continued into the third quarter.

“This second quarter has been a very busy period for the corporate finance team and as we continue to work on number of other deals that will complete soon, there is no sign of a let-up,” he added.

Another northeast firm that is sharing in the region’s abundance of quality deals is Watson Burton. Among its corporate finance team’s high profile transactions was representing Boldon-based Immunodiagnostic Systems plc on its £17 million acquisition of Nordic Bioscience Diagnostics.

Its other transactions include advising J A Hotels on its acquisition of Parkmore Hotel at Eaglescliffe, near Yarm.

Watson Burton’s Lester Wilson said the firm has experienced high levels of activity this year, particularly in the last few months.

“We are currently working on some very demanding high value transactions that we expect to be able to announce in the coming weeks,” he added. “Looking further ahead we are excited about the second half of the year as the pipeline is extremely strong.”

On the following pages, firms in the region talk about their experiences of deal making in the past year and their expectations for the next 12 months.

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