M&A activity briefing Q1 2017

Q1’s M&A activity briefing sets out a sample of the businesses for sale and active acquirers that we are currently aware of. There continues to be a high volume of opportunities crossing our desks and we can’t include them all in this briefing so, if you are considering selling your business or looking to buy another company, please get in touch so that we can search our full database using your specific parameters.

In addition to deal information, this quarter’s commentary piece shares some reflections on the murky world of financial forecasting!

"Both Sides Now"

At Irving Ramsay we take on a variety of roles for clients, acting in several different capacities. The roles almost always have one thing in common – financial forecasts. Where we provide FD support to clients, we are involved in the preparation of short term cashflows and internal budgets. If we are carrying out due diligence, we are checking and commenting on other people’s forecasts. In advisory roles, we will prepare a set of three year financial projections, based on assumptions made by management.

We like to think these multiple roles give us a real insight into the forecasting process. So, what have we learned?

They are almost always wrong – chaos theory and the law of unintended consequences being what they are, it is highly unlikely that any set of forecasts beyond a three month window will be fully accurate.

The underlying assumptions are critically important – these should be complete, clear and readily traceable into the forecasts. Unexpected events will always occur, but if the starting point was sensible and reasonable given the information available at the time, the forecasts can usually be justified.

Measurement is key – whatever the purpose of the forecast, the way in which performance is tracked and measured – and variances investigated – is of critical importance.

Contingency and the impact of delays –we know that costs tend to accrue with annoying regularity, whereas delays usually impact on forecast revenues. The cumulative impact of such delays can be surprisingly extensive and so it’s always worth building in a sensible amount of contingency.

Integration – it should go without saying, but there should always be an integrated P&L, balance sheet and cashflow. Double entry bookkeeping is maligned as dull but it’s incredibly useful at highlighting errors and inconsistencies in a set of forecasts.

It’s always in the VAT – if the balance sheet doesn’t balance, you know where to start looking.

If you need assistance with forecasting, from whichever side you’re approaching the issue, give us a call.

“I've looked at life from both sides now” –Joni Mitchell

Businesses for sale

 Sector  Description  Location Turnover (£000)
 Construction A timber merchants whose revenue is split equally between hardwood, softwood and panels North East  c5,000 
 Construction Glass wall coverings  UK 3,000 
 Construction

Installation of external home improvement

Scotland 2,560
 Contracting

Electrical contractor: fire, security & data systems

North East  1,150
Contracting Office supplies, furniture & ergonomic solutions North 1,750
Education & training Training & recruitment UK 2,800 
 Engineering Precision engineering: design & manufacturing Midlands   2,500  
Engineering Waterworks engineer UK 5,000
Engineering Independent construction & engineering consultancy UK 18,000 
Engineering Steel fabrication Yorkshire  2,200
FM Hygienic services & facilities maintenance UK  2,200
IT  Specialist provider of IT solutions & high quality hardware & software South 5,500 
IT  Microsoft Dynamics CRM North 2,400
Logistics Design, manufacture & distribution of storage & handling equipment North  6,000
Manufacturing A specialist designer and manufacturer of high-end gift and confectionery boxes and corporate promotional packaging North East c1,000
Manufacturing Handheld UHF RFID readers Midlands 4,000
Manufacturing Unique cameras, processors & software UK 2,140
Motor Distributor of automotive parts to the UK aftermarket North 2,500 
 Nursing & Car Domiciliary care agency North East 4,000
 Retail Online retailer: leading pre-school sector UK 12,000
Services Private ambulance service North 2,100
Support Services A developer and vendor of marine navigation software that has been established for over 20 years and has a long-term client base and patents North East c2,000
Waste Management A full service waste management organisation that delivers services across waste transfer, cleaning, skip hire and other ancillary services North West c10,000

 

Acquisition searches

Recycling

Aggregates, builders’ yards and merchants, car breakers, recycling, skip hire and waste management. Target must have premises on freehold or long leasehold of more than an acre in size

Construction

Major building materials supplier. Criteria - established distribution businesses with specialism in worktops (kitchen and bathroom) and laminates. Preferably located in the south of the UK. Any size considered

Manufacturing

Manufacturer or distributor of plastic products (both injected moulded and extruded products considered). Revenue between £1m and £20m, anywhere in the UK

IT services

Managed services, consultancy, network specialists and software development and/or integration. Criteria - turnover £2m to £10m, positive cashflow.  Preferably UK but will consider Europe

Education & training

Companies providing HR consultancy, payroll or other similar services to schools and Multi

Academy Trusts (MATs). Turnover in excess of £500k

Retail

Established privately funded investor seeking acquisition of challenging businesses in the European retail and consumer sectors. Strong credentials in retail turnarounds. Criteria retail/online businesses across Europe. Revenues in excess of €100m 

Disclaimer

The purpose of this document is to assist recipients in deciding whether to investigate an opportunity. It is not intended to form the basis of any transaction. Recipients must make their own independent assessment of the opportunity and should obtain independent professional advice.

The opportunities referenced in this document are not all Irving Ramsay engagements and have not been independently verified by Irving Ramsay Limited who do not give, nor have any authority to give, any representation or warranty (express or implied) as to their accuracy or completeness.