Clearwater defies credit crunch with £350m deals in Q1

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The market for mid-cap deals remains buoyant even though the credit crunch has affected the top end, says Clearwater Corporate Finance.

The firm says its results for the first quarter of 2008, during which it advised on 11 deals worth over £350 million in total, demonstrate that funders still have an appetite for supporting high quality deals up to £250 million.

Deals on which Clearwater advised in the first three months included:
  • The £77 million secondary buy-out of Britton Group, one of Europe’s largest extrusion and plastic packaging manufacturer, which was backed by HSBC Private Equity and HSBC Bank plc
  • The acquisition of Summit Medical, a leading UK supplier of hip and knee implants and disposable medical devices, by US-based private equity house The Riverside Company for £36 million
  • The secondary buy-out of fitted furniture company Neville Johnson Group, backed by Key Capital Partners
  • The investment in engineering software company CSC by Livingbridge
  • The £140 million sale of Solvay’s Caprolactones business to Swedish-based Perstorp AB with funding provided by PAI Partners
  • The acquisition of 25 Famous Footwear factory outlet units from shoe retailer Stead & Simpson by Jacobson Ventures, a new company formed by entrepreneur Harvey Jacobson

Clearwater managing partner Phil Burns said: “Our experience shows there is still plenty of funding available for mid-market businesses – it’s the very large deals that are at a standstill. We are seeing continuing strong demand from private equity houses seeking good investments and there is no shortage of banks willing to support them.

“Funders are a bit more cautious than a year or so ago but gaps in provision are being filled by others, rather than stopping deals happening altogether. Dealmaking is a bit harder so advisors are having to work harder for their money.”

Burns continues: “The UK is also the preferred base for overseas buyers taking their first steps into Europe and we expect continued interest from cross border buyers – particularly from Asia. Our sale of Calrec Audio to D&M Holdings of Japan is a good example of this. And buyers pay more when they have a strategic reason for an acquisition which is good news for those selling out.”